Oral Answers to Questions

OFFICE OF THE DEPUTY PRIME MINISTER

The Deputy Prime Minister was asked—

Regional Assemblies

Richard Bacon: If he will make a statement on the estimated costs of regional assemblies.

Nick Raynsford: An elected regional assembly will cost around £30 million to set up, including the costs of referendums and elections, and around £25 million a year to run.

Richard Bacon: Given that the Welsh Assembly cost £55 million—four times more than planned—and that the Scottish Parliament cost £430 million, which was 10 times more than planned, is it not likely that the proposed regional assemblies will turn out to be simply another way of squandering money that people would prefer to be spent on teachers and nurses?

Nick Raynsford: No, it is not. The first point on which the hon. Gentleman might reflect is that our proposals for elected regional assemblies are for small, streamlined bodies, which will focus on delivering services and developing strategic approaches to policy that the Government and quangos currently discharge. That will restore democratic control to the regions and add value. Secondly, he knows that, next week, when the boundary committee presents its proposals for local government reorganisation, there will be considerable scope for reducing bureaucracy and making savings through cutting out unnecessary tiers of government.

Hilton Dawson: Does my right hon. Friend agree that the figures that he gave represent an excellent deal for democracy? He is a much more patient and tolerant soul than me, but does he not occasionally get irritated at the ridiculous scaremongering from Conservative Members, who have neither the vision nor the enterprise to recognise the important moment for regional devolution that is almost upon us?

Nick Raynsford: My hon. Friend makes a valid point and some kind remarks. I am a tolerant soul, but I have witnessed the Conservative party opposing devolution in Scotland and subsequently changing its mind; opposing devolution in Wales and then changing its mind; and opposing devolution in London and changing its mind. I look forward to Conservative Members changing their minds and recognising that it is right to bring democracy to the English regions.

George Osborne: The no campaign in the north-west is a cross-party campaign that includes many Labour Members of Parliament. Will the Minister allow its representatives to speak at Government-sponsored public meetings that he and the Deputy Prime Minister attend so that the public can hear both sides of the argument? Does he not want to share a platform with Labour Members of Parliament?

Nick Raynsford: The hon. Gentleman knows that there is provision for funding the yes and no campaigns at a later stage in the process so that they can present their case to the electorate. That is right and proper. However, the Government are currently exercising their responsibility to ensure that the public are properly informed. Last night, I was speaking in north Lincolnshire at a hearing that was welcomed by people who want information and welcomed the presence of a Minister to answer questions factually and informatively. I am surprised that the hon. Gentleman objects to that.

Tony Lloyd: Will my right hon. Friend revert to the theme of cost? Will he calculate or speculate on the money forgone by the northern regions when successive Tory Governments underfunded health, industrial investment and education there to prop up their electoral base in the south of England?

Nick Raynsford: My hon. Friend makes an important point because our purpose in extending democracy to the regions is to allow each region to maximise its potential strengths and economic development opportunity. It is sad that, in the past 80 or so years, there has been a disparity in the economic development rates of different parts of this country, with the northern regions failing on the whole to share the high growth rates that some southern regions achieved. We are working hard, through the creation of regional development agencies, the Lyons review and other measures, to redress that balance. The Conservative party shows no concern for assisting some of the more deprived parts of our country to improve their economic performance.

Caroline Spelman: I refute that last claim. The Minister may recall that the 1997 Labour manifesto pledged that regional assemblies
	"would require . . . confirmation by independent auditors that no additional public expenditure overall would be involved."
	Does he stand by that manifesto pledge?

Nick Raynsford: We have made it absolutely clear—[Interruption.] Yes, the hon. Lady should pay attention to this. We have made it absolutely clear that we will publish the full costs. Those costs will include the potential savings from local government reorganisation, which we are not able to publish until we have the proposals from the boundary committee. The committee will present to us its estimates of the best options for wholly unitary local government in those parts of the three northern regions that currently have two tiers of local government. Until we have those estimates, we cannot produce full costings, but I assure the hon. Lady that, as and when we have them, we will produce those costings. I suspect that she will be surprised when she sees the scope that exists for making savings by cutting out unnecessary tiers of government.

Caroline Spelman: The fact is that the vast cost of these regional assemblies will end up having to be met by council tax. The Minister has clearly not seen the latest research from Cambridge university showing that abolishing counties or district councils will add £110 to the council tax bill of every resident. Has he not heard the pain expressed up and down the country about the level to which the council tax has risen under this Labour Government?

Nick Raynsford: I have two points to make to the hon. Lady. The first is that the Government have taken effective action against excessive council tax increases. If Conservative councils had been as successful as Labour councils in keeping their council tax levels down, there would be a lower average rate of council tax this year.
	Secondly, on local government reorganisation, the hon. Lady is living in a time warp. She is recalling the figures from the period when her party was in power, and when local government reorganisation led to substantial additional costs because of the bungled way in which the Banham review approached the matter. The hon. Lady should not anticipate the conclusions of the boundary committee. Any sensible, serious analysis will depend on figures that have yet to be produced, so I would say to her and to the academics whom she is quoting that theoretical arguments are all very well, but they should wait to see the actual recommendations. We shall then be able to do proper costings, and we shall do so.

Joyce Quin: Did my right hon. Friend note the very encouraging poll in Newcastle's The Journal at the beginning of this week, which showed that those intending to vote yes in the referendum greatly outnumbered those intending to vote no? Did he also notice, however, that the support would be even greater if the Government were to strengthen the role of the assemblies in the draft powers Bill? Will he take that message to heart?

Nick Raynsford: My right hon. Friend has been a doughty campaigner for regional devolution for many years, and she will have been heartened, as all those who care about the issue will be, to see the evidence of growing support in all the northern regions and, obviously, in the north-east. In the course of the hearings that have been held over recent months, we have discussed the powers set out in the White Paper and any possible changes that might be made to them. We shall obviously bear my right hon. Friend's points in mind before final conclusions are reached and we publish a draft Bill, which we intend to do later this summer.

New Deal for Communities

Roger Williams: If he will make a statement on the new deal for communities.

Yvette Cooper: The new deal for communities programme supports 39 severely deprived areas with investment of around £2 billion over 10 years. It has very high levels of community involvement, and the NDCs have reported crime falling and employment and education levels improving faster than the national average.

Roger Williams: The Minister's assessment contradicts the evaluation of her own Department, which found that
	"community partnerships are stuck in cycles of blame and remain in a continual state of crisis",
	and that expenditure on administration was in excess of 10 per cent. of total expenditure. When will the Minister get a grip on the scheme and ensure that we get value for money and that the quality of life experienced by people in our most deprived communities is improved?

Yvette Cooper: The hon. Gentleman is talking complete nonsense. The evaluation published by the Department included Professor Lawless's assessment that the NDCs are making progress, and
	"should be commended"
	as they
	"are beginning to deliver a wide range of projects to improve people's quality of life."
	I am very sorry that the Liberal Democrats want to kick in the teeth the 50,000 people who are involved locally in the new deal for communities and who are making a real difference to their communities and areas.

Bill O'Brien: When considering the new deal for communities, will my hon. Friend take into consideration those communities that do not match the formula for urban renewal, but which could qualify for urban regeneration? There are urban areas in need of consideration for the new deal, and I would ask her to consider those areas that wish to be included in urban regeneration schemes and which would benefit from the Government's programme to help such communities. Will she consider those areas favourably?

Yvette Cooper: My hon. Friend is right that regeneration needs to extend more widely than the new deal for communities. Certainly, the neighbourhood renewal fund is supporting 88 districts across the country, which are making real progress and closing the gap on the national average in terms of employment and education. He is also right that there are other broader areas in which investment and regeneration is needed. That is why the work of the regional development agencies is so important.

Local Government Finance

Hugh Bayley: If he will obtain data to allow a market forces factor in the local government funding formula to be examined for the City of York separately from North Yorkshire.

Phil Hope: The area cost adjustment is the element of the local government funding formula that takes account of higher wage and rate costs in each area. The new area cost adjustment is a huge improvement on the old system, which gave a top-up only to authorities in the south-east. The Office of the Deputy Prime Minister uses wage data from the whole North Yorkshire area to calculate the area cost adjustment for the City of York and for North Yorkshire county council. That is to ensure that the area cost adjustment is stable and reliable from year to year.

Hugh Bayley: Wages and house prices are higher in York than in North Yorkshire, which of course is an entirely separate local authority area, but York, unlike Leeds, does not receive the area cost adjustment. Will my hon. Friend consider changing the formula so that York's costs can be calculated separately from those of North Yorkshire and we can be considered for the area cost adjustment in relation to our costs, which are different from those in North Yorkshire? Does he recognise that it is important for York to get this help after this year, in which it has faced from its Liberal Democrat council one of the highest council tax rises in the country?

Phil Hope: Currently, the funding formula is set for at least the next year, but I understand my hon. Friend's concerns and we may explore the potential for calculating the area cost adjustment at a finer geographical level. I am anxious, however, to ensure that we have enough wage data to produce stable and reliable area cost factors each year. My hon. Friend is a great champion for his constituency, and he will be pleased to hear that his council in York got an increase of 6.2 per cent. in grant from the Labour Government, and an extra £10.5 million in specific grant. I therefore share his concerns that Liberal Democrats in York raised their council tax by 8.5 per cent. The fact is that Liberal Democrat councils cost more.

Anne McIntosh: I hope that the market forces provision will recognise not only that, as the hon. Member for City of York (Hugh Bayley) said, wages are lower in North Yorkshire than in the City of York, but that residents living in villages such as Nun Monkton in North Yorkshire will be given preference over travelling showmen trying to set up winter quarters in that area?

Phil Hope: I am not absolutely certain about the connection between the area cost adjustment and the village of Nun Monkton, but central Government funding for local government means that rural areas, like urban areas, have received substantially more grant from this Government than they ever did from the Tories.

Mental Health Inquiry

Brian Iddon: What proportion of respondents to the social exclusion unit's inquiry into mental health was made up of people who had experienced mental health problems.

Doug Naysmith: How many individuals with mental health problems contributed via the internet to the social exclusion unit inquiry into mental health.

Keith Hill: Of 950 written responses to the social exclusion unit consultation, 28 per cent. were from people with experience of mental health problems. There were 33 e-mailed responses, and 11 from groups. The SEU recognises the importance of engaging directly with adults with mental health problems. That is why it arranged a series of consultation events that involved some 500 people.

Brian Iddon: In response to that inquiry, this week, Mind published a report entitled "Not alone?", which shows that 84 per cent. of people who suffer a mental health problem feel isolated, compared with 29 per cent. of the general population. Since ready use of a telephone was cited as helpful in overcoming that isolation, does my right hon. Friend agree that local authorities should be encouraged to provide helplines, such as Bolton metropolitan borough council's careline, to help vulnerable people, and that the delivery of all public services can play a role in removing the stigma of mental health problems and the discrimination that they bring?

Keith Hill: Like my hon. Friend, I welcome the Mind report, which calls attention to a number of important issues consistent with the findings of the SEU mental health project. I congratulate my hon. Friend on introducing the careline initiative in Bolton. The forthcoming SEU report will identify actions needed to improve access to advice and support for adults with mental health problems through, for example, primary care and a lessening of the financial insecurity that can reduce use of the telephone, which is so often a lifeline and a means of escape from isolation.

Doug Naysmith: I too congratulate the Minister and the SEU on inquiring into links between mental health problems. What the Minister said about the contribution of the internet was fascinating, and raises further interesting questions. Mind's report "Not alone?", mentioned by my hon. Friend the Member for Bolton, South-East (Dr. Iddon), found 72 per cent. of respondents to its survey believed online access was or could be beneficial; but 20 per cent. of those, who were either using or wishing to use the internet, did not have regular access to it. Have the Government any plans to enable people with mental health problems in particular to gain access to what is nowadays a basic communication tool?

Keith Hill: My hon. Friend is right. All the evidence suggests that those on the lowest incomes have least access to the internet. We realise that that is a particular difficulty for people with mental health problems, and we think it very important for them to have direct access to those making decisions on such issues. We expect the SEU report, which is about to be published, to make a major contribution to improving that access.

Tony Baldry: If I were writing about mental health, I would be inclined to write to the Secretary of State for Health. It is currently rather difficult to know what is happening in mainstream Whitehall Departments, what policy is being drawn up in Cabinet Office units, and what policy is being drawn up in units in the Minister's Department. Could the Minister help us by reminding us in writing what units exist in the ODPM and what policies they are working on? That is a genuinely helpful question. It is particularly important for us to know when the SEU is to deal with new policies, so that we know when to make representations on them.

Keith Hill: I agree that joined-up government, as they say, is important in all aspects of government, and especially important in this context. The SEU report will go some way towards achieving a more seamless approach to mental health problems across Government, but I undertake to write to the hon. Gentleman explaining what routes are appropriate.

Lynne Jones: I was pleased to learn this morning that the SEU is employing people with direct experience of being at the receiving end of mental health services. Does my right hon. Friend agree that one good way of combating the stigma and social exclusion suffered by people with mental health problems is to set a good example in terms of staff recruitment and retention? What are my right hon. Friend and the SEU doing to disseminate best practice in enlightened parts of the public service, and in private sector organisations such as BT?

Keith Hill: The purpose of the SEU report will be to improve dissemination of best practice. I am grateful to my hon. Friend for acknowledging the unit's determination to involve people with mental health problems. As she said, a member of the SEU's mental health team has experience of enduring mental health problems.

Regional Assemblies

Louise Ellman: What effects a directly elected assembly for the north-west will have on business.

John Prescott: Improving the economic performance of the region will be at the heart of the objectives of an elected regional assembly in the north-west. If the three northern regions improve their productivity to the current southern region average, they will be nearly £35 billion a year better off—and most of that increase will be in the north-west, which is the largest region of the three. A directly elected assembly for the north-west will put responsibilities for releasing that potential in the hands of the people of the region, not the civil servants in Whitehall.

Louise Ellman: Does my right hon. Friend agree that good transport links are essential for successful businesses? Although there are significant transport powers in the proposed assemblies, can he offer any strengthened powers so that good transport can be developed for successful business in the north-west and elsewhere?

John Prescott: My hon. Friend makes a major point on the importance of transport and economic development. Certainly the regions will play a major part in decisions on transport infrastructure, but she will also realise that in the north-west alone there are two passenger transport executives, which have a considerable influence on transport investment in the regions. The Secretary of State for Transport has already made it clear to the House that he thinks that more of those decisions should be taken in the regions. That will no doubt be reflected in the Bill that we will introduce.

Nigel Evans: We do not have any oyster bars in the north-west of England, but we have a number of other businesses. I spoke this morning to the chairman of the CBI in the north-west, Damien Waters, who is very concerned that the costs of the regional assembly will be borne by his members. They have seen what has happened in Scotland, with the fiasco of the palace that is being built costing 10 times more than was estimated, and the same has happened in Wales, with the building costing much more than was estimated in the White Paper. Why should those business people trust what this Government are saying about the costs of the new regional assemblies?

John Prescott: I think that the hon. Gentleman looks more like a kipper than an oyster. I note what he says about the costs of the assemblies, but does that mean that his party is now committed to abolishing the Scottish Parliament? Does it mean that it is committed to abolishing the Welsh Assembly? It promised to do that, but has now changed its mind. If the hon. Gentleman is concerned about the cost, is he also concerned that his Front-Bench team are committed to abolishing the regional development agencies that will make a real difference to economic development?

Bernard Jenkin: No one believes the right hon. Gentleman's bluster. He is talking a load of cod. He is talking about investment in transport, but an extra layer of politicians and bureaucrats with no new money and no new powers, as Jeff Rooker has said in the House of Lords, will mean that there will not be the resources to improve transport. How does the right hon. Gentleman explain the fact that business is overwhelmingly opposed to elected regional assemblies? The Lancashire chamber of commerce has voted against them, as has the Manchester chamber of commerce. The Hull chamber of commerce, in the right hon. Gentleman's own constituency, has voted against elected regional assemblies. How does he explain that?

John Prescott: I have to tell the hon. Gentleman that at the hearings that we have been holding, the chambers of commerce and the CBI have been expressing views that have changed from those that the hon. Gentleman suggests they held early on in the debate—[Interruption.] Well, reference has already been made to Newcastle's The Journal, which has said that business is quite clearly moving towards a more favourable position. At the end of the day, however, the people will make the decision—we are giving them that right. The hon. Gentleman spends so much time complaining about the hearings, but we are there explaining to people what we are intending to do. All the polls show that those hearings are having an effect in raising awareness, although we must wait to see what the vote is. The hon. Gentleman should not spend all his time asking stupid questions here on the cost of the hearings—questions with a total cost of £7,000, which is the same as the cost of one hearing with 200 people. We prefer to consult the people, and at the end of the day, they will make the decision.

Council Tax

Lawrie Quinn: What plans he has to make council tax liability more closely related to income.

Nick Raynsford: The balance of funding review is looking at possible reforms to council tax. We intend it to report this summer.

Lawrie Quinn: I thank my right hon. Friend for that answer. Can he confirm that the evidence given by the Chartered Institute of Public Finance and Accountancy to the balance of funding review suggests that the proposed pay-as-you-earn scheme for local income tax would be impractical and far from fair? Is it not time that the parties in this House recognised that the public know when they are being sold a pup, and is it not time that we achieved transparency and fairness in terms of local government income?

Nick Raynsford: The balance of funding review has received very good evidence from a variety of sources, including from CIPFA, whose report has certainly poured a great deal of cold water on the Liberal Democrats' over-optimistic assumptions about a local income tax. Such assumptions were well exposed during Monday evening's debate in this House.

Edward Davey: Will the Minister confirm that he failed to read out on Monday all the very positive things that CIPFA said about local income tax? Has he decided totally to reject the idea of a local income tax, even though it is used in America, Japan, Sweden, Denmark and Swinland—[Interruption.] Sorry, Mr. Speaker, I meant to say Switzerland. [Interruption.]

Mr. Speaker: Order. I can hear some hon. Members, but not the hon. Gentleman.

Edward Davey: Sorry, Mr. Speaker, that was very Prescottian of me. Was the Minister pre-empting the conclusion of the balance of funding review and ruling out local income tax at any time, in any form?

Nick Raynsford: Well, I say to the hon. Gentleman what I said to his colleagues on Monday evening. They invited me to read out the four recommendations that supported a local income tax, and I said to them that, in all fairness, if I did so I would have to read out the six recommendations that were against the idea. In the interest of economy and of proceeding smoothly, I thought that I would spare the hon. Gentleman and his colleagues that pain. We know that the Liberal Democrats love to live in never-never land; now we realise that they want to live in swindleland.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Peter Bradley: If he will list his official engagements for Wednesday 19 May.

Tony Blair: This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

Peter Bradley: Having read the papers all week, I am relieved to see that the Prime Minister is still here—[Hon. Members: "Oh!"] We may all have been victims of another media hoax. The Government have rightly dedicated both attention and resources to the experience of young people in the home, at school and in further and higher education, but they have perhaps dedicated less attention and fewer resources to the quality of their spare time. Does the Prime Minister agree that the principal reason why young people congregate on street corners is that they have literally nowhere else to go? Will he take the opportunity provided by the forthcoming spending review to dedicate a real increase in resources to the youth service and to facilities for young people?

Tony Blair: About £500 million is now provided every year for youth services and for community services specifically dedicated to young people. That will increase by almost £30 million in this financial year, but in addition, we are pioneering the concept of extended schools—just such a school has been announced today in my hon. Friend's constituency—in which we also provide facilities for youngsters after school hours. Such schools are used as a basis for the local community to bring together some of the youth services, so that young people are kept out of trouble and off the streets, and given something proper and sensible to do. Together with the measures that we are taking in respect of antisocial behaviour, that will make a real difference in many of our communities.

Michael Howard: May I begin by thanking the Prime Minister for responding so promptly to my call last week for compensation for people who have lost their pension entitlement? May I also welcome this week's announcement that there may be variable penalty points for speeding, as we suggested last month, just as we welcomed his change of mind—however belated—about a referendum on the EU constitution? So we seem to be working rather well together in the interests of the country: we put forward the policies, and he adopts them. Following those very happy precedents, may I ask him to respond to another of our proposals. Will he ask the Chancellor to drop the petrol tax rise due in September?

Tony Blair: Of course we understand the concern about oil prices, but it is not due to Government action. The high price is due to a number of factors, the most important of which is extremely high demand in China and America. Other factors include low stocks in the United States, so we do not see these as the same circumstances as obtained last year.
	When the right hon. and learned Gentleman says that we are following his record in all respects, I have to point out that I shall certainly not follow his record in these following respects: we shall not go back to boom-and-bust economics; we shall not go back to 3 million unemployed; we shall not go back to under-investment in the health service; and we shall certainly not reintroduce the poll tax.

Michael Howard: I am afraid that none of that will wash. People are interested—[Interruption.] People are interested in what is happening now and what will happen in the future. Does the Prime Minister not appreciate the hardship that a further increase in petrol tax will cause? Last year, the Chancellor told us that he was going to defer the annual increase in petrol tax because of high and volatile oil prices. Petrol then cost 77p a litre and now costs 82p a litre. This week, oil prices reached a new high. So will the Prime Minister now have a word with his Chancellor—he does not have to go to Loch Fyne to do it—and drop the proposed increase?

Tony Blair: Well,
	"I certainly don't think that anybody ought to get in any kind of blind panic about this but nor incidentally do I think that there's anything very material that the UK Government can do and obviously one shouldn't blame the Government for oil prices rising."
	[Interruption.] That is a quote from the shadow Chancellor. [Interruption.] I do not think that it is me who needs to have a word with my colleague; it is him who needs to have a word with his—and he need not go to Loch Fyne for that either.

Michael Howard: Does the Prime Minister not understand the simple difference between the oil price—of course the Government cannot control that—and the tax on petrol, which the Chancellor can directly control? That is the question I put to the Prime Minister; that is the question that he has refused to answer twice. Why will he not tell the Chancellor to drop the proposed increase in the tax on petrol?

Tony Blair: When we are talking about the tax on petrol, let me remind the right hon. and learned Gentleman of his record when he was in government. We have done a little research and found the figures. In the last seven years of the Conservative Government, the fuel duty went up by 17p a litre. It has gone up by only 10p a litre under this Government. Of course we know it is a problem, for reasons that he has accepted are beyond the Government's control, but it is important to realise that we have to run the economy in an effective way. He talks about not going back to the past, but the strong economy with record employment and record low unemployment is happening now.

Hon. Members: More.

Mr. Speaker: Order.

Richard Burden: Will my right hon. Friend join me in welcoming today the Palestinian parliamentary delegation, which is watching our proceedings, and which, as you know Mr. Speaker, is led by your counterpart in the Palestinian legislative council? He comes from Gaza, where 100 homes have been demolished in the last few days and 3,000 over three years—in contravention of the fourth Geneva convention. Will my right hon. Friend join me in condemning that destruction of homes? As a high contracting party to that convention, what will Britain do to ensure that it is enforced?

Tony Blair: I join my hon. Friend in welcoming the delegation from the Palestinian Parliament. I assure them that the exchanges that have just taken place do not represent the total sum of what happens in parliamentary proceedings. My hon. Friend makes a very serious point. We entirely understand Israel's concerns about acts of terrorism, but what happened yesterday was unacceptable and wrong.
	It is very clear now that we need to do several things. We need to press on with the proposals for disengagement from the whole of the Gaza and parts of the west bank. We then need to allow the international community to help moderate Palestinians re-establish control and authority in those areas over which they will have control and authority. Above all else, we need to begin a process that allows us to restart proper negotiations that lead to a final status settlement.
	Obviously, that would happen far more easily if the terrorism stopped, and therefore we all have a responsibility to do two things. First, we must do what we can to stop the terrorism while acting in accordance with international law. Secondly, we must make sure, above all else, that we get to the point where Palestinians and Israelis can once again sit down in proper negotiation and reach a settlement. I am sure that that is what the majority of Israelis and Palestinians want.

Charles Kennedy: Can the Prime Minister confirm that the 30 June handover of power in Iraq will involve the transfer of full sovereignty, and the authority that goes with it, to the new Iraqi Government? Will that Government be able, for example, to retain control of both their oil revenues and their prisons?

Tony Blair: The answer to that is yes. The new Iraqi Government must have full sovereignty after 30 June. That will give them the rights that all sovereign Governments have.

Charles Kennedy: I thank the Prime Minister for that very clear reply. I am sure that the whole House will welcome it.
	On the related question of the possible further deployment of British troops, if the US requests that further British troops be deployed—and that may happen outside the present British sector and involve an extension of the troops' role into Najaf—will the Prime Minister confirm that the House of Commons will be able to vote before any such deployment takes place? Will he also guarantee that any such decision and announcement will not be slipped out during a parliamentary recess?

Tony Blair: The House will be informed, and there will be consultation in the normal way. However, I do not believe it right to set a precedent that there must be a vote before any further troop deployment is undertaken. No decision has yet been taken on whether to deploy further troops, or about where that might happen. Discussions are continuing at the moment, but the important thing is that this country continues to play its full part in trying to create a democratic and stable state in Iraq. There are obviously huge difficulties, as was made clear by the assassination of the president of the governing council earlier this week. Responsibility for that assassination is now being claimed by one of the leaders of al-Qaeda, which shows us exactly what we are up against. However, the one thing about which I have absolutely no doubt is that it is our job to stay and get the job done. We must make sure that Iraq becomes that democratic and stable state, because that is in the interests of the Iraqis, the region and the world.

Gerald Kaufman: My question follows my right hon. Friend's reply to my hon. Friend the Member for Birmingham, Northfield (Richard Burden). Taking into account the fact that my right hon. Friend is uniquely responsible for the process that led to the creation of the middle eastern road map, and that the Gaza strip has become a blood-bespattered charnel house, will he condemn the murder of an Israeli women and her four daughters, and the deaths of those Israeli soldiers who gave their lives futilely in pursuit of a futile policy? At the same time, will he also condemn, in the most categorical terms, the Israeli Government's policy of indiscriminate slaughter in the Gaza strip, which yesterday led to the deaths of 20 people, including two children? Will he condemn too that Government's policy of destroying large numbers of homes, and take the earliest possible opportunity to use his unique influence to get the road map back on track?

Tony Blair: My right hon. Friend the Foreign Secretary—and I echo the words that he used yesterday—has already made it clear why we regard what happened yesterday to be unacceptable and wrong, as I said earlier. My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) is quite right to list the pain and grief on the other side, and in particular the brutal and appalling murder of a pregnant Israeli women and her young children. He makes clear the importance of beginning again a process that means that we must do everything that we can to stop the terrorism that gets in the way of achieving a political settlement, and which gets us back into proper negotiations. The road map remains the only way we can get back into those final status negotiation discussions. I will do everything that I can over the coming weeks to see that we are able to be in that position, because it is the only possibility for the future in both Palestine and Israel.

Michael Howard: The Prime Minister knows that I agree with what he has just said, and in his efforts to get the road map back on track he has my full support.
	In the Deputy Prime Minister's interview with The Times on Saturday, he said:
	"I think it's true that when plates appear to be moving, everyone positions themselves for it."
	What does the Prime Minister think that the Deputy Prime Minister meant?

Tony Blair: I have no intention of engaging in a textual analysis of what my right hon. Friend said. I will leave that to others better qualified than myself. In the end, the issue will be very simple: it will be between the record of the right hon. and learned Gentleman in government and the record of this Government. Perhaps we should now debate that.

Michael Howard: Let me see if I can help the Prime Minister a bit, because that was not the only thing that the Deputy Prime Minister said. He was asked whether the Cabinet was discussing life after the Prime Minister, and he said:
	"Yes, people do talk about it and you get that discussion."
	He added, helpfully:
	"Every British Prime Minister goes eventually."
	We know what the Deputy Prime Minister had in mind. Let me say this to the Prime Minister: I intend, if elected, to serve a full term of office—does he?

Tony Blair: I have to say to the right hon. and learned Gentleman that since I have been Prime Minister, it is not Prime Ministers who have gone but Leaders of the Opposition.

Michael Howard: I can assure the Prime Minister that no one is plotting against my leadership. But everyone will notice that he did not answer the question. What everyone will want to know is whether if they vote Blair, they will get Brown. This week the Leader of the House said that the Prime Minister has hit a "really big sticky patch", the worst of his premiership; the Secretary of State for Health gave members of the Cabinet a dressing-down; the Chancellor issued a one-paragraph statement of support; and the Chancellor and the Deputy Prime Minister have been discussing a "smooth transition" at an oyster bar in Argyll. Is it not the case that the most senior members of the Prime Minister's Cabinet—the two people he is sitting between now—have stitched him up like a kipper?

Tony Blair: It is interesting how the right hon. and learned Gentleman never wants to discuss the issues. I wonder why—[Interruption.]

Mr. Speaker: Order. The House is suspended.
	 Sitting suspended.

On resuming—

Speaker's Statement

Mr. Speaker: Following this morning's suspension in the Chamber, I wish to make a brief statement.
	As Members will know, a security screen has been erected in front of the main part of the Strangers Gallery. Members sponsoring guests or visitors for admission to the unscreened Galleries are required to certify that their guests are known to them. They are also required to vouch for their good behaviour. Members whose guests disrupt the Chamber will be required to apologise to the House; it will be for the House to decide what further action to take.
	In this case, I understand that a member of the House of Lords signed the visitor who disrupted our proceedings into the Gallery.

Dennis Skinner: Abolish them!

Mr. Speaker: Order. The hon. Gentleman must hear me out.
	I expect the relevant member of the House of Lords to provide me with a full explanation before this day is out. I am directing the Serjeant at Arms that the right of members of the House of Lords to sponsor visitors for admission to this Chamber is suspended with immediate effect.
	I am pleased to inform the House that, after detailed examination, the substance has been found not to be harmful. I and the authorities in the House will review the way in which this incident has been dealt with to ensure that all appropriate procedures are followed, if necessary, in the future.

David Winnick: On that point, Mr. Speaker.

Mr. Speaker: I am obliged to take points of order, but I must say to the hon. Gentleman that the House has been disrupted, Prime Minister's Question Time has been stopped and the best thing we can do is to get back to business as usual.

Hon. Members: Hear, hear.

Telecommunications Masts (Need and Safety Tests)

David Amess: I beg to move,
	That leave be given to bring in a Bill to establish need and safety tests before telecommunications masts can be erected; to amend the Town and Country Planning Act 1990 and the General Permitted Development Order 1995; and for connected purposes.
	I am delighted that we are not allowing our proceedings to be disrupted by the shenanigans earlier today. I for one will never be silenced on my concerns about the erection of mobile phone masts.
	When mobile phones were invented, I had no idea of their ramifications for all our lives. They seem to dominate our very existence. Every MP I talk to has anxieties about mobile phones and mobile phone masts, so why did Parliament not seize the opportunity offered by the Bill introduced by my hon. Friend the Member for West Suffolk (Mr. Spring) to legislate on the matter? I hope that it is not because Parliament is afraid of the power of the five large mobile phone operators.
	Everywhere I go, people have mobile phones fixed to their ears, engaged in all sorts of conversations. We cannot help hearing what the conversations are about. Most of them are trivial nonsense—for instance, "I'll be home, dear, in 10 minutes", or "Would you like tomato ketchup with your meal this evening?" Who wants to know what those people are doing? I do not know, but everyone now seems to be talking on mobile phones.
	As far as I am concerned, this new technology comes at a cost. The health risks from mobile phones—people cannot have mobile phones without mobile phone masts—are absolutely clear from what Sir William Stewart said. When it suits those who want to defend mobile phone masts, they quote Sir William Stewart, but what they do not say is that he amplified his personal concerns about phones to the British Association for the Advancement of Science in September 2001. He called for the cost of handsets to be increased to restrict their use by children. Sir William—the great expert in this field—said that he would not allow his grandchildren to use a mobile phone. That says it all.
	I am concerned not only about the potential health risks of brain tumours caused by mobile phones, but about the mental health risks. Anyone with children must see how our children have been polluted by the way in which they use mobile phones and send texts and video pictures to one another. That is very serious. Given that many Members of Parliament are endlessly presenting petitions and saying how concerned their constituents are about the situation, the House should have no difficulty in giving full approval to my ten-minute Bill, without any need for a debate. I expect my Bill to be nodded through its various stages.
	Mobile telecommunications masts are being erected all over the United Kingdom, and they are certainly being put up in large numbers in Southend, West. Mobile telephone users expect to have a reception at all times, but with that comes a price to local residents. My goodness, the people who put up those masts are clever in beating the rules and regulations. The masts might look like trees or flagpoles. They make them look beautiful, but those masts emit levels of radiation that can damage the thin skulls of our children—and perhaps some adults who have thin skulls as well—so the House should take seriously people's genuine concerns about the health risks.
	The Bill that I am seeking to persuade the House to accept would amend the Town and Country Planning Act 1990. Furthermore, the Planning and Compulsory Purchase Act 2004 amends the 1990 Act, but does not replace it. My Bill seeks to redress that anomaly. The 1990 Act does not deal with separate categories of planning permission according to the type of development involved. Mobile telecommunications masts are therefore included with all other types of development, despite the fact that mobile telecommunications masts are a different type of development.
	Section 70 of the 1990 Act deals with the determination of planning applications. It says:
	"(1) Where an application is made to a local planning authority for planning permission—
	(a) subject to sections 91 and 92, they may grant planning permission, either unconditionally or subject to such conditions as they think fit; or
	(b) they may refuse planning permission.
	(2) In dealing with such an application the authority shall have regard to the provisions of the development plan, so far as material to the application, and to any other material considerations.
	(3) Subsection (1) has effect subject to sections 65, 66 and 67 and to the following provisions of this Act, to sections 66, 67, 72 and 73 of the Planning (Listed Buildings and Conservation Areas) Act 1990 and to section 15 of the Health Services Act 1976."
	I hope that the House is impressed by the considerable work done by the House of Commons Library on my behalf.
	Those measures are outdated. Furthermore, the 2004 Act does not attempt to address the problem. The siting of a mobile telecommunications mast that is under 15 m is a very different type of development. My Bill would update that legislation and bring it into the 21st century. Rather than allow the telecommunications companies to get around the regulations and laws that the House passes, my Bill would put the onus on operators to prove to the local authority planning committee that the masts are necessary. They would also have to prove to the planning committee that the masts posed no health risks whatsoever.
	Last week, as a prelude to my Bill, I called a public meeting through the Mobile Operators Association. The nonsense involved in trying to arrange such a meeting at which the operators could meet the general public went on for two years. To cut a long story short, in spite of complying with the advice from the Mobile Operators Association, I was told eventually that
	"it is not an area that we wish to engage in."
	No wonder, because they do not want to face the general public; they want Members of Parliament to take the flak instead. Of the five operators, the only two that turned up were O2 and Orange, and the general public's comments gave them considerable food for thought.
	Members of the public constantly tell all Members of Parliament that a mast is too near a school or that it is in the middle of a built-up area. The problem is serious and safety should be of paramount importance. That is why I was very glad that the noble Lady Miller of Chilthorne Domer asked for further clarification on the matter in the other place from the noble Lord Warner, who is, I believe, about to report shortly.
	The Bill is well overdue. As all hon. Members agree with it, we do not need any extra time because I hope that it will go through on the nod. I commend the Bill to the House.
	Question put and agreed to.
	Bill ordered to be brought in by Mr. David Amess, Mr. Simon Burns, Mr. Howard Flight, Mr. David Atkinson, Mr. Michael Clapham, Mr. Andrew Rosindell, Andrew Selous, Mr. Richard Spring, Tom Cox, Janet Anderson and Dr. Ian Gibson.

Telecommunications Masts (Need and Safety Tests)

Mr. David Amess accordingly presented a Bill to establish need and safety tests before telecommunications masts can be erected; to amend the Town and Country Planning Act 1990 and the General Permitted Development Order 1995; and for connected purpose: And the same was read the First time; and ordered to be read a Second time on Friday 18 June, and to be printed [Bill 112].

Orders of the Day
	 — 
	Pensions Bill
	 — 
	[2nd Allotted Day]

As amended in the Standing Committee, further considered.

New Clause 34
	 — 
	Financial assistance scheme for members of certain pension schemes

'(1)   The Secretary of State must make provision, by regulations, for a scheme for making payments to, or in respect of, qualifying members of qualifying pension schemes ("the financial assistance scheme").
	(2)   For the purposes of this section—
	"qualifying member", in relation to a qualifying pension scheme, means a person—
	(a)   who, at such time as may be prescribed, is a member of the scheme in respect of whom the scheme's pension liabilities are unlikely to be satisfied in full because the scheme has insufficient assets, or
	(b)   who, at such time as may be prescribed, had ceased to be a member of the scheme and in respect of whom the scheme's pension liabilities were not satisfied in full, before he ceased to be such a member, because the scheme had insufficient assets,
	and in respect of whom prescribed conditions are satisfied at such time as may be prescribed;
	"qualifying pension scheme" means an occupational pension scheme (including such a scheme which has been fully wound up)—
	(a)   which, at such time as may be prescribed, is not—
	(i)   a money purchase scheme, or
	(ii)   a scheme of a prescribed description,
	(b)   the winding up of which began during such period as may be prescribed, and
	(c)   the employer in relation to which satisfies such conditions as may be prescribed at such time as may be prescribed;
	"scheme's pension liabilities", in respect of a member of a qualifying pension scheme, means the liabilities of the scheme to, or in respect of, the member in respect of pensions or other benefits (including increases in pensions),
	and a qualifying pension scheme has or had, insufficient assets if the assets of the scheme are, or were, insufficient to satisfy in full the liabilities of the scheme calculated in the prescribed manner.
	(3)   Regulations under subsection (1) may, in particular, make provision—
	(a)   for the financial assistance scheme to be managed by the Secretary of State, a body established by or for the purposes of the regulations or such other person as may be prescribed;
	(b)   for the person who manages the financial assistance scheme ("the scheme manager") to hold (whether on trust or otherwise), manage and apply a fund in accordance with the regulations or, where the fund is held on trust, the deed of trust;
	(c)   for the property, rights and liabilities of qualifying pension schemes to be transferred to the scheme manager in prescribed circumstances and for the trustees or managers of a qualifying pension scheme in respect of which such a transfer has occurred to be discharged from prescribed liabilities;
	(d)   prescribing the circumstances in which payments are to be made by the scheme manager to, or in respect of, qualifying members of qualifying pension schemes and the manner in which the amount of any payment is to be determined, and, where the fund is held by the fund manager on trust, the circumstances and manner may be prescribed by reference to the deed of trust;
	(e)   authorising the Secretary of State—
	(i)   where he is not the scheme manager, to pay grants to the scheme manager;
	(ii)   where he is the scheme manager, to pay amounts into the fund held by him in accordance with the regulations;
	(iii)   to pay grants to other prescribed persons in connection with the financial assistance scheme;
	(f)   prescribing the circumstances in which amounts are to be paid into or out of the fund held by the scheme manager;
	(g)   conferring functions in relation to the financial assistance scheme on the Pensions Regulator or the Board of the Pension Protection Fund;
	(h)   providing for a person to exercise a discretion in dealing with any matter in relation to the financial assistance scheme;
	(i)   applying any provision of Part 1 or 2 with such modifications as may be prescribed;
	and such regulations may make different provision for different cases or descriptions of case and include such incidental, supplementary, consequential or transitional provision as appears to the Secretary of State to be expedient.
	(4)   Any amount which, by virtue of subsection (3)(e), the Secretary of State pays under regulations under subsection (1) is to be paid out of money provided by Parliament.
	(5)   A time or period prescribed under subsection (2) may fall (or, in the case of a period, wholly or partly fall) at a time before the passing of this Act.
	(6)   Nothing in this section prejudices the operation of section 272 (subordinate legislation (general provisions)).'.
	Brought up, and read the First time.

Malcolm Wicks: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to take the following:
	Amendment (d) to the proposed new clause, line 7, after 'prescribed', insert
	'(irrespective of the time at which the winding up of the scheme took place)'.
	Amendment (e) to the proposed new clause, line 10, after 'prescribed', insert
	'(irrespective of the time at which the winding up of the scheme took place)'.
	Amendment (a) to the proposed new clause, line 73, at end add—
	'(   )   The first payments from the financial assistance scheme shall be made within six months of the coming into force of this Act;'.
	Amendment (b) to the proposed new clause, line 73, at end add—
	'(   )   Schemes where the qualifying pension scheme was closed whilst the sponsoring employer was solvent shall be qualifying pension schemes for the purpose of this section;'.
	Amendment ((a)) to amendment (b); in line 1, after 'closed', insert
	'up until 14th May 2004'.
	Amendment (c) to the proposed new clause, line 73, at end add—
	'(   )   Assistance from the financial assistance scheme shall be at least sufficient to provide total benefits to qualifying members as they would have received had their scheme fallen within the scope of the Pension Protection Fund.'.
	Amendment No. 212, in page 76, line 27 Clause 113, leave out subsection (2).
	Government amendments Nos. 216 to 218.

Malcolm Wicks: Nothing will prevent the Pensions Bill from passing into law.
	The pension protection fund is a major social policy advance that will bring protection and security to more than 10 million pension scheme members and their families. We hope that it will start in April next year, subject to the will of Parliament. I believe that one day it will be viewed as a substantial achievement of the Labour Government, but it is overshadowed by a cloud—the plight of the tens of thousands of workers who have already lost their pension rights or a large percentage of them, which is debilitating for those affected and undermines confidence in the idea of saving for a pension.
	The Secretary of State, other Ministers and I have been considering for some time whether something could be done to alleviate the situation. We have been assisted by the representations of many hon. Members, including my hon. Friends the Members for Cardiff, West (Kevin Brennan), for Sittingbourne and Sheppey (Mr. Wyatt), for St. Helens, North (Mr. Watts), for Ayr (Sandra Osborne), for Hemel Hempstead (Mr. McWalter) and many others. All have expressed deep concern, which we share, about the position of their constituents. I should add that my right hon. Friend the Member for Birkenhead (Mr. Field) has been a stern social security saint, judging our stewardship of this vital issue. [Interruption.] It is those in front of me from whom I have nothing to fear. The Secretary of State, other Ministers and I have met a number of members of affected schemes. I cannot mention all the schemes, but Allied Steel and Wire, Ravenhead Glass and Dexion come to mind. Most of those people expect to receive a much reduced pension. I have been deeply moved, as we all have, by the distress and bewilderment of many people who, after long years of paying into a pension scheme, have been told that, after all, the pension they are relying on, and which they have paid for, will not be there.

Douglas Hogg: Will the hon. Gentleman tell the House how, as we are establishing a precedent in the new clause, we can guard against having to pay compensation in absence of fault? That troubles one very much, because one does not wish to establish such a precedent.

Malcolm Wicks: Although one might use a variety of terms in English usage, this is not compensation, and there is no legal liability. We are proposing an assistance scheme.

Alan Howarth: My hon. Friend said that the Government do not have a legal obligation. When my right hon. Friend the Secretary of State for Work and Pensions spoke on the radio at the weekend about the plight of workers who have lost much of their pensions in defined benefit schemes, he said, "My goodness they've got a human case." On the basis of humanity, why should the Minister not respond with equal generosity to people who, through no fault of their own, have lost out in defined contribution schemes, which they were required to join as a condition of employment? In fairness, why would he not then extend help to pension policyholders in Equitable Life, where the Government's duty of care was certainly no less?

Madam Deputy Speaker: Order. That is a rather lengthy intervention.

Malcolm Wicks: There is general acceptance of the argument that there is a genuine difference between the situation described by my right hon. Friend and that facing this group of workers, some of whom had to join their pension schemes and are now in difficulty. As I describe our proposals, some of those issues may become clearer.

Several hon. Members: rose—

Malcolm Wicks: I should like to describe the progress we have made, because hon. Members may wish to question me about some of the details. First, however, I shall give way to my hon. Friend the Member for St. Helens, North.

Dave Watts: I thank my hon. Friend for his comments. I urge him to ignore the beliefs of some of my hon. Friends, as we very much welcome the decision, which, we understand, was difficult and involved the Treasury, the Prime Minister and the Secretary of State for Work and Pensions. Firewalls have had to be built in, but we welcome and support the proposals.

Malcolm Wicks: I thank my hon. Friend for those remarks.

Several hon. Members: rose—

Malcolm Wicks: I think it would help the House if I made some progress; there will be plenty of time for dialogue and debate later.
	Many people—ordinary, hard-working people—are being left with their legitimate expectations of a comfortable retirement in tatters. That cannot be right. One of the many people whom I have met was distraught that her plan to retire this year on an expected two thirds of her final salary has been wrecked as a result of her employer's insolvency. Coming up to her 60s, after 18 years of service in the company and 18 years of contribution, she has had to decide to continue working. It would be a hard heart that was not moved by the plight of such shattered individuals.
	In the meetings that I have had—I know my ministerial colleagues would echo this—I was touched by the remarkable restraint and quiet dignity of many of those people as they modestly explained their plight. I asked what it meant for them, and their stories are in my mind, such as that of the man who, in his early 60s, had to return to rather backbreaking work at an airport, lifting luggage. People told me—reluctantly—about the effect on their family, their marriage, their health and their mental state. When I met these people, the phrase "proper people" always came to my mind. They are proper people, hard working, who have taken on their responsibilities, not least for their own pensions futures.
	The Government have been clear all along that if we could do something to help such people, that would be the right thing to do. That is why I am so pleased—indeed, honoured—to be at the Dispatch Box to move new clause 34. It will assist people who have lost out severely as a result of the winding-up of their pension scheme as a consequence of the employer's insolvency.

Iris Robinson: Will the measure close the loophole in the case of companies that do not declare insolvency, but decide to uproot and move to other parts of the world, leaving a deficit in the pension scheme? Will people be protected in such cases?

Malcolm Wicks: I may be able to cover some of those issues in a moment. The scheme is very much for the insolvent employer. It cannot be about any disappointments in a range of pension schemes. Where an employer is solvent, the responsibility rests with that employer.
	Over the past few months we have been clear with the House that a potential action for the group I was describing raises a number of complex issues. In particular, we have been clear, and I am sure the House will understand, that we cannot accept liability for private pension losses in general. Indeed, it would be quite wrong to do so, and would mean the taxpayer writing a blank cheque. No Government can undertake to nationalise financial risk. While we do not accept any Government legal liability, we do accept that the situation is very serious. It is right that the Government take action to provide some assistance.
	The new clause requires the Secretary of State to establish a financial assistance scheme for people who are in underfunded occupational pension schemes that have begun winding up before the pension protection fund is set up. The Government have put forward £400 million over 20 years to help address the serious losses that some now face. It is open to industry to offer further support. We hope that that support will be forthcoming. This money will not cover everyone who feels aggrieved, nor will it give those it does help everything they might want, but it represents significant help to those who have lost the most.

Steve Webb: rose—

Jim Cunningham: rose—

Malcolm Wicks: I shall give way, then I shall try to keep to my word and make some progress.

Steve Webb: We know that the Government are proposing a 20-year scheme. Can the Minister explain their reasoning? Some of the workers affected are already past pension age and therefore need money now, but some have not yet reached pension age and will still be alive in, say, 30 years. What will happen in the final 10 years or so?

Malcolm Wicks: It is our judgment that £400 million over a 20-year period, fed into whatever scheme we set up—the mechanics have still to be decided—will be sufficient. There will be a three-yearly review of the administration and of how the scheme is working.

Jim Cunningham: I welcome the Government's initiative in establishing the scheme, but will it extend into the past to cover people such as Matrix Churchill and Massey Ferguson workers in Coventry?

Malcolm Wicks: I shall make progress, because I can cover those issues.
	Some important choices remain on how we should proceed. Hon. Members will appreciate that the matter is complex, and we must work quickly with all those involved to explore how we can balance the funds available. The coverage must ensure that those suffering losses are helped according to the principles of openness, fairness and, very importantly, operational practicability. The role of the industry, employers, actuaries, trustees and trade unions in resolving those issues is as great as that of the Government.

Alan Howarth: Will the Minister give way?

Malcolm Wicks: No, I shall make some progress. I hope that my right hon. Friend will not think me discourteous, but he has already intervened once.
	I would like briefly to take the House through how we intend to turn our commitment into reality. It involves four phases of work: first, we shall engage with our partners and industry experts, including the trade unions; secondly, we shall design the detail of the policy and the operational framework; thirdly, we shall prepare to implement the scheme; and fourthly, we shall go live and make payments.
	The House will want to know about the key milestones in that process. By the end of May, we will have established our working relationships with key partners at all levels. This week, the Secretary of State will write to stakeholders to open a discussion, so that we can address the choices that we must make in partnership. As part of that engagement, the Secretary of State and I plan to meet key stakeholders as soon as possible.
	By the end of June, as already promised, we shall lay a report on the results of our investigations to establish the extent of the problem and the numbers affected. Over the summer, we shall work closely with industry experts in a design phase and in exploring the options for operational delivery, on which a number of alternatives are available. Some alternatives involve running on schemes and topping them up, while others involve winding up schemes and providing assistance. Options for delivery might include that undertaken by the DWP, an industry-led body or a stand-alone trust.
	By the end of November, we can begin to consult on the details of the regulations. As we expect to use affirmative regulations, hon. Members will have the opportunity to consider our proposals in depth in Committee, and debate will also occur in the other place. By the spring of 2005, we intend to have the scheme in existence with a view to being able to make the first payments as quickly as possible. The programme is demanding, and successful delivery will be possible only through a close working partnership, the establishment of which is our immediate priority.

Kali Mountford: Will my hon. Friend clarify two points on how he intends to operate the scheme? First, when he examines the parameters for who might qualify, will he ensure that he does not open the floodgates and increase payments above the sum that he announced? Secondly, will he ensure that as much as possible is spent on the people who need help, rather than on administrating the scheme?

Malcolm Wicks: Those matters are crucial, and I hope that I have reassured my hon. Friend on her first point. We cannot nationalise risk and think that a particular case deserves assistance. Given the level of need, the question of how the money will be distributed is uppermost in our minds.

John Redwood: I am grateful to the Minister for his courtesy in giving way. My entry in the Register of Members' Interests includes my being a trustee of a pension fund, but I am not speaking on its behalf. The Minister says that the figure is £200 million over 20 years, but he also says that he does not know how many people will be affected. If he discovers that many more people are affected, will he increase the sum, and if far fewer people are affected, will he decrease it?

Malcolm Wicks: We are about to publish a report examining the evidence base on that question, and the collection of that data is obviously at an advanced stage. The pensions industry also has an opportunity to contribute more money. As the Government have no legal liability, the word "compensation" is not appropriate—it is an assistance programme—but we feel that there is an ethical duty to act, as well as a need to restore confidence in pensions. I would hope that the pensions industry, too, recognises that responsibility.

Dave Watts: Does my hon. Friend remember that in a previous debate the Conservatives supported a campaign to pay some form of compensation to this group of workers? Will he seek an assurance that they will join him in trying to get the insurance industry to pay a contribution into the fund?

Malcolm Wicks: Even from a narrow economic and financial viewpoint, it would be a very useful investment, given the need to restore confidence and get the word "security" back into social security as regards pensions.

Norman Lamb: The Minister said that one of his stepping stones was to do more work on determining how many people might be entitled to help from such a scheme. How did he determine the sum of £400 million? Is it entirely arbitrary? He says that the Government believe that it is enough, but enough for what?

Malcolm Wicks: It is a very significant and substantial amount, and it relates to our arithmetic about the size of the scheme. It represents a very significant draw on Exchequer resources, and it will be larger if industry will make a contribution. I set out the four areas of work—stepping stones—and the six milestones. I think that Conservative Members were grappling with those two figures—[Interruption.] Well, milestones are a step forward in many respects. Given their difficulties, it is just as well that they are not in charge of collecting the evidence base. Once we have done that, we shall be able to consider these questions in more detail.

David Willetts: The Minister is right. I admit that I was confused as to how four steps could cover six stepping stones, but he explained that authoritatively.
	The Minister said that the £400 million relates to the arithmetic of the number of people affected—that is, 60,000. Can he explain how?

Malcolm Wicks: In determining how much money we wish to seek from the Exchequer, we obviously bear in mind what the evidence is telling us. It is a very substantial amount in relation to those matters.

Malcolm Savidge: As my hon. Friend knows, Richards of Aberdeen Ltd., a company in my constituency, has a failed pension scheme. Can he assure us that the new clause and the timetable that he described give sufficient flexibility for hon. Members with affected constituents to be fully consulted before detailed regulations are brought in?

Malcolm Wicks: It is not possible to comment on a particular scheme, and my hon. Friend would not expect me to do so, as there are many hundreds in the same position. However, I am of course happy to talk to him and to other Members affected if that would prove helpful.

David Taylor: On 4 October 2000, 572 deferred pensioners and 371 existing pensioners at British United Shoe Machinery—BUSM—were hit by that company's closure. My hon. Friend talks of industry contributing to the cost of the scheme. What incentives does he plan to put in place to encourage them so to do? That would clearly improve the deal that the Government have rightly hammered out over the past weeks and months, which is most welcome to those who worked for the former BUSM—not the present company, which is an entirely separate management buy-out situated at Enderby.

Malcolm Wicks: I would hope that £400 million of public money is a considerable incentive. As I said, I think that other partners would want to engage with us in restoring confidence in the pension system.

David Drew: Will my hon. Friend discuss the administration process with the Department of Trade and Industry? Many pension funds get into difficulties because of what happens to the parent company, and I am pleased that my hon. Friend will meet the workers of Lister-Petter next week. Problems arise because the pension fund is an unsecured creditor, way down the list of priorities, which means that it has little purchase over what happens to the future of the company. A pension fund can therefore be driven into insolvency when there may be other ways in which the parent company could be made to help. My hon. Friend is right to say that industry should help, including by examining the way in which other creditors bear some responsibility for what happens to the pension fund. Does he agree with that?

Malcolm Wicks: I understand my hon. Friend's point. We are always in close contact with the Department of Trade and Industry on such matters. In Committee and on Report yesterday, we tabled amendments to protect against what some euphemistically describe as "moral hazard"—one hon. Member called it "fraud"—whereby a parent company can, through restructuring, allegedly dump pensions on a subsidiary company. We need to stop such action.

Several hon. Members: rose—

Malcolm Wicks: I shall give way twice more at this stage, but I must then deal with the amendments that various colleagues have tabled.

Mark Francois: The Minister has been courteous in allowing so many interventions on an important matter. The issue affects several of my constituents, so I welcome in principle the Government's decision to do something about it. As with anything to do with pensions, the devil is in the detail. It is evident from the Minister's remarks that some detail remains to be worked out on exactly how the provision will operate. Will he give an undertaking to all hon. Members that, when the decisions have been made, we will all be provided with detailed briefing material, not simply so that we can understand it but so that we can ensure that it is passed on to our constituents who are affected?

Malcolm Wicks: That is a helpful and constructive suggestion. We are always happy to meet Members of Parliament to discuss such matters. I hope that the process that I have described shows that there will be opportunities for consultation. Later, consultation will take place on regulations.

Alan Howarth: I applaud the generosity of my hon. Friend's impulse. I am well aware of the predicament of Allied Steel and Wire workers in south Wales. None the less, I do not understand how he defines "a deserving case" or a "proper" person. Will he explain the Government's ethical case for helping some pensioners in misfortune but not others?

Malcolm Wicks: Recently—and perhaps throughout history—people have lost money when financial circumstances have moved in the wrong direction, and financial arrangements, such as pensions schemes and life insurance policies, have saddened the customer. I do not say that lightly—some circumstances have been serious, as we know. However, in the circumstances that we are considering, many workers were required to join the company pension scheme as part of their employment contract. We argue that that is a special case. It would be dangerous if we were to get on a slippery slope of believing that the Government could stand behind all such financial risk.

Nigel Waterson: I am grateful to the Minister, who is being generous. Before he moves on to the detailed amendments, will he tell us whether it has been decided in the discussions that have been taking place behind closed doors in the past few days that the trade union-inspired litigation in the European Court will be abandoned or settled?

Malcolm Wicks: I have heard no word about that one way or the other. I hope that, like other parties, the unions will consider what we say today and make a judgment about their legal action.

Annabelle Ewing: rose—

Malcolm Wicks: I shall give way to the hon. Lady and then I really will get on.

Annabelle Ewing: The Minister has, indeed, been generous this afternoon in taking interventions. He mentioned the figure of £400 million, which has come from somewhere. Is he genuinely telling hon. Members that no estimates of the average percentage payout have been conducted?

Malcolm Wicks: We are not in a position to do that. However, I have set out the critical milestones for the approaching period. I hope that that will reassure hon. Members that we have a process for dealing with the detail. Our intention is that people will receive a significant proportion of their pension rights. Something that is often forgotten in these discussions is that many of these schemes, although bust in a colloquial sense, still have considerable scheme assets. We are not just talking about the arithmetic of the £400 million; we are often talking about scheme assets as well and, of course, we hope for a contribution from the industry.
	Coming as it does at the start of this process, the Government new clause simply requires the establishment of a financial assistance scheme and confers wide enabling powers so that the specifics can be expressed in regulations. When the issue of assisting those who had lost most of their expected pension was first raised, there was a lack of reliable information on the scale and nature of the problem. We have since begun to gather this important data, which will soon placed in the Library. As this information builds up, we shall be in a much better position to develop a structure for an assistance scheme. The new clause reflects our commitment to helping pension scheme members by requiring the setting up of an assistance scheme, and gives us the power necessary to enable us to devise an appropriate structure for that help. I therefore commend the Government new clause to the House as the right route for achieving the outcome that we all desire.
	I now turn to the two amendments tabled by my right hon. Friend the Member for Birkenhead (Mr. Field), who is not in his normal place, which is very confusing. [Hon. Members: "He's behind you!"] Is he? I know that he is in the House, but he is not in his usual place.
	The two amendments amend the definition of a qualifying member to allow access to the financial assistance scheme, regardless of when the scheme began to wind up. We have yet to consult on the detail, but I believe that we will probably need a cut-off point, both to make an assistance scheme administratively feasible and to have some certainty about the funding arrangements. Indefinite backdating is simply not practical. Our current thinking is that the financial assistance scheme should cover schemes that began winding up after April 1997. That date is significant because it was the implementation date of key provisions of the then Government's 1995 Pensions Act. Any starting point must bear a relationship to that important Act of Parliament.

Frank Field: Will my hon. Friend give way?

Malcolm Wicks: I was about to ask my right hon. Friend to withdraw his amendments. I shall now give him the opportunity to do so.

Frank Field: From what we have heard so far, I shall certainly not. The Minister's case just does not stand up. When he argued, in response to my right hon. Friend the Member for Newport, East (Alan Howarth), that we should not cover every risk, including Equitable Life, he put forward only one reason, which was that we are dealing largely with people who had to join a scheme as a condition of employment. People such as me, who joined Equitable Life, had no such condition imposed on them. The nearer to date that he takes a cut-off point, the greater the chances will be—given the changes that the Conservatives made—that members had a choice as to whether to join a scheme. The further back we go, the more likely it is that they will have had to join. So, on the Minister's own evidence today, he should be arguing the very opposite case. We should be less concerned with those who more recently lost out, and more concerned with the others, because the further we go back, the more we find that joining a scheme was a cast-iron condition of employment: people had to be in a pension scheme if they wanted a job.

Malcolm Wicks: We shall have the opportunity to look at these issues and consult on them, and I shall obviously be happy to talk to my right hon. Friend about them. There are practical difficulties relating to the question of how far we go back. Obviously, the money will stretch less far if we keep going back for decades. There is some significance to the change of regime following the 1995 Act, which is why we think that any starting point should bear some relationship to that.

Andrew Miller: If my hon. Friend is relying on a key date that was triggered by an Act that he now recognises as flawed, is not that an illogical date to choose? If there has to be a date—I do not think that there should be—would it not be better to choose the date on which the 1995 Act received Royal Assent?

Malcolm Wicks: Clearly, there must be some date. The point at which the key provisions of the 1995 Act come into force is important. May I emphasise to my hon. Friend that I have said that I feel that a starting point must bear some relation to the 1995 Act? We have an open mind, not an empty mind, on that. If he reads our amendment carefully, he will see that it is deliberately drafted in broad terms as an enabling measure. I hope that he will take some comfort from that.
	The amendment tabled by the hon. Member for Northavon (Mr. Webb) would require the financial assistance scheme to begin making payments within six months of this Bill coming into force. I have already explained the milestones that we are setting to make sure that we have a body in place by this time next year and to make payments as quickly as possible thereafter. Including a deadline for payments in legislation at this stage of design, however, could lead to wasted effort and a poorly administered scheme. We would be doing nobody any favours by rushing these proposals through, least of all the very people whom we are trying to help.
	The second amendment tabled by the hon. Member for Northavon would allow schemes that are closed while the sponsoring employer is solvent to qualify for the financial assistance scheme. The term "closed scheme" is generally applied to schemes that are still operating, albeit closed to new members. I assume that he was referring to schemes in wind-up. If so, the amendment would allow schemes that wind up underfunded, but with a solvent employer, to qualify for assistance under the proposed assistance scheme.
	At this point, it might be helpful if I were also to deal with the amendment tabled by my right hon. Friend the Member for Birkenhead to that amendment, which would limit the qualification to solvent schemes that wound up prior to 14 May 2004. One of our key concerns has been to ensure that solvent companies remain responsible for their pension provision. A pension promise made should be a pension promise honoured. We have introduced regulations that can be used by trustees of schemes that started winding up after 11 June 2003. Those regulations place a debt on solvent employers to pay the full costs of members' benefits if their pension scheme is wound up. Solvent companies must be held responsible for the pension provision that they have arranged.
	The third amendment put forward by the hon. Member for Northavon would set the level of assistance at no less than the amount that would be provided by the pension protection fund. All of us want to ensure that the people who will be helped by the financial assistance scheme receive meaningful levels of benefit. The final level of assistance that can be provided will depend on several factors, such as the number of claims that are submitted, the final size of the fund and the method of delivering assistance. At this stage, however, it seems unrealistic to expect that assistance will be set as high as future pension protection fund levels, as in future members will benefit from cover paid for by a premium to the pension protection fund.
	In the light of what I said, I would hope that my right hon. Friend and the hon. Gentleman might consider withdrawing their amendments. Those are all the amendments to the Government proposal to set up a financial assistance scheme.
	The amendment tabled by the hon. Member for Havant (Mr. Willetts) relates to the pension protection fund. It would, in effect, make the pension protection fund retrospective. It provides an apparently simple answer to a complex problem—[Interruption.] He says from a sedentary position that that is not necessarily a bad thing. He normally reverses that by providing complex answers to simple problems. However, the pension protection fund will be financed through a levy on occupational defined benefit and hybrid occupational pension schemes. Retrospective cover would mean that this levy would be required to meet unknown and potentially very large liabilities. It is possible that those additional costs could threaten the viability of the fund itself. In addition, it would be unfair to place such a disproportionate burden on levy payers who are running schemes. We have always maintained that the new fund is similar to an insurance scheme in some respects: it should not cover people against events that have already happened. In view of what I have said in setting out the Government proposal, I therefore ask the hon. Gentleman to withdraw his amendment.
	Finally, I should like to deal with some small amendments to clauses 265 and 273 that are consequential on proposed new clause 34. The amendments to clause 265 simply add the financial assistance scheme provision to the list of provisions that may be modified by regulation—if necessary—when being applied to either a hybrid or a multi-employer scheme. The amendment to clause 273 will add the financial assistance scheme provision to the list of provisions that require use of the affirmative procedure for any statutory instrument made under them, for the reasons I have just given.

Edward Garnier: I apologise for not being here at the beginning of the Minister's speech. I had duties elsewhere.
	I understand the Minister's wish to be careful about open-ended commitments that would expose the Treasury to huge amounts of liability. Let me remind him, however, that the Lord Chancellor's Department—the Department for Constitutional Affairs—has encouraged access to the courts through what is called "after-the-event insurance", which underpins something called "conditional fee arrangements". It seems to me that the principle that the Department has opened up applies directly to the recovery of lost pensions. The Government are now setting up an after-the-event insurance scheme. The problem for my constituents, many of whom have worked for British United Shoe Machinery, is that the system will not—[Interruption.]

Madam Deputy Speaker: Order. I hope that the hon. and learned Gentleman will soon be bringing his intervention to a close.

Edward Garnier: I shall do so immediately, Madam Deputy Speaker. The problem is that the system set up by the Minister is nowhere near adequate to protect my constituents, including those who have worked for BUSM, who have seen their pensions disappear.

Malcolm Wicks: Naturally, I anticipated that question. I could give a very lucid answer, but given the lateness of the hour and the disruptions we have experienced, I wonder whether the hon. and learned Gentleman would allow me to write to him—after I have taken advice from my learned friends, of course.

Kevin Brennan: Does my hon. Friend agree that it is not just a matter of sympathy in cases such as this? We are talking about defined benefit schemes, not defined contribution schemes. The benefit was supposed to be a promise. As late as 2002, the Financial Services Authority's "guide to the risks of opting out of your employer's pension scheme" stated:
	"Some types of employers' schemes (the ones called 'final salary' or 'defined benefit' schemes) give you a guaranteed pension. The amount of pension you get from a personal pension is unpredictable".
	That makes it pretty clear why the state has some responsibility to act, regardless of whether it is set down in legal terms.

Malcolm Wicks: I agree, and it is important to remember that many people had to join a pension scheme as a condition of employment.
	A significant number of Members on both sides of the House have represented constituents in dire straits very ably, but I think my hon. Friend the Member for Cardiff, West deserves a special mention as a parliamentary champion of this group of workers, and indeed as a parliamentary hero—[Interruption.] One among many, I am sure.
	Opposition Members made fun of my confusing stepping stones with milestones. Let me say that one step for our Department is a giant step for our Department.
	I can assure the House not just that we have the outlines of a plan, but that we have drawn up a clear route march towards implementation. By the end of May we shall have established our relationship with key partners, including trade unions, as all levels. Over the summer we will be doing critical work on the design of the scheme so that by the end of November we will be able to consult on regulations. By the spring of next year—just one year away—we will have a scheme in existence, with a view to being able to make the first payments as soon as possible.
	We have a clear plan for the future with the pension protection fund, but there is a current and grave pensions injustice. Our proposals will bring support to decent, hard-working people—those whom I describe as proper people—and I commend them with enthusiasm to the House.

David Willetts: The fact that we are debating these proposals today is a tribute to pressure from Members on both sides to help the 60,000 people who have been affected by the winding up of their pension schemes. I am pleased that, even at this late stage in the process, we now have something from the Government. We have an obligation to help the people affected.
	I see the three most powerful arguments for giving help as follows: first, the human distress that many people are suffering as a result of their pension being so much less than they had hoped for; secondly, the effect on everyone's confidence in saving for their pension if they see the horrific experience of those 60,000 people endlessly repeated; and thirdly, as the hon. Member for Cardiff, West (Kevin Brennan) quite rightly mentioned, the public statements that have been made by a variety of public institutions that saving in a company final salary pension scheme is in some sense secure, safe or guaranteed. Those expressions were thrown around. Looking back, they were thrown around rather too lightly, but people took them seriously. That is why they are particularly angry.

David Taylor: Will the hon. Gentleman take this opportunity to confess to the House whether during Prime Minister's questions earlier today, when his party leader claimed credit for the change that the Government are now introducing, he felt just a scintilla of embarrassment at the fact that his party had opposed Second Reading?

David Willetts: If the hon. Gentleman looks at the reasoned amendment we tabled when the Bill came to the House on Second Reading, he will see that one of the specific reasons that we gave was that it did nothing to help the 60,000 people who had lost out as a result of their pensions winding up. That was specifically set out in our reasoned amendment because it was one of the big omissions from the Bill. We are pleased, even at this late stage, that that matter has been tackled.

Dave Watts: May I remind the hon. Gentleman that many Labour Members have been campaigning for more than two and a half years on that issue? It seems to me that the only time when the Opposition joined the campaign was when they thought that the Government were going to concede and provide compensation to that group of workers. Does he agree?

David Willetts: If I may say so, we have had several debates on this specific subject, which Opposition Members have raised over a long period. It might well be the case that it was the intervention from my right hon. and learned Friend the Leader of the Opposition that finally clinched the matter. There were then panic meetings among the Chancellor, the Prime Minister and the Secretary of State. The—[Interruption.]

Madam Deputy Speaker: Order. The House must come to order.

David Willetts: The Prime Minister ran from this Chamber last Wednesday and asked why it was that nothing had yet been done.

John Robertson: On a point of order, Madam Deputy Speaker. I would ask you to rule on the remark that the hon. Member for Havant (Mr. Willetts) has just made. The Prime Minister was ushered out by the Secretary of State for Health after something was thrown down into the Chamber. The fact of the matter is that it was the Leader of the Opposition who would not come back and take the drubbing that he was getting from the Prime Minister at Question Time.

Madam Deputy Speaker: That is not a point of order for me. This is an important debate and many Members in the Chamber want to contribute to it. We should proceed as quickly as possible. I call Mr. David Willetts.

David Willetts: Perhaps I could just explain that I was referring to events last Wednesday. That was when my right hon. and learned Friend the Leader of the Opposition raised this point, and it was after that, later on in the day, that there was a meeting of Ministers.

Douglas Hogg: May I press my hon. Friend—I should point out that he supports the provision—on the principle on which the Government are operating? In the past, assistance—to use a consensual word—has always been given when Government agencies were at fault, an example being the Barlow Clowes affair. It is far from clear to me that ring-fencing is possible. The question has been raised of Equitable Life members. Where lies the distinction in principle between them and the people is question?

David Willetts: It appears that people were led to believe by various public bodies that their defined benefit schemes were in some sense guaranteed or safe. It has been asked whether the legal case, in which this point will doubtless prove important, will be pursued. This could indeed still be a matter for the courts.

Several hon. Members: rose—

David Willetts: I shall give way to the hon. Member for Cardiff, West first.

Kevin Brennan: In the case of Equitable Life, members chose to put their money into that scheme because they thought that it was offering the best rate in the market. No Government agency promised them that their pension was secure or guaranteed.

David Willetts: It would be a great pity if one group of Members in this House argued that we should help the victims of pension wind-ups and do nothing to help the victims of Equitable Life, and another group argued the opposite. Both sets of victims have a case—although they are different cases—and both give rise to the question of whether public bodies have, on occasion, misled people or failed to discharge their obligations.

Malcolm Savidge: Does the hon. Gentleman remember that Labour Members asked questions about this issue a fortnight and three weeks before the Leader of the Opposition raised it, and that the Prime Minister made clear his intentions? The phrase "jumping on bandwagons" comes to mind.

David Willetts: The trouble was that although the Prime Minister said that he was going to do something, nothing happened. We have pursued this issue for a long time and we have raised it regularly; indeed, we debated it last year and in February of this year. It was the Prime Minister's failure to pursue the rather confused assurances that he gave during the two preceding Prime Minister's questions that caused the Leader of the Opposition to raise this issue, which finally led to action being taken.

Several hon. Members: rose—

David Willetts: I want to question the Minister about his proposal, so once I have given way to the hon. Member for North-West Leicestershire (David Taylor), I shall try to make some progress.

David Taylor: I am grateful to the hon. Gentleman for giving way yet again; he is being most generous. He is trying to establish the logic that, because the Leader of the Opposition raised this issue last week and the announcement was made subsequently, those two incidents are somehow connected. Given the brain that the hon. Gentleman is reputed to have, he will doubtless be familiar with the post hoc, ergo propter hoc logical fallacy. Does he acknowledge that, in fact, pure coincidence and undiluted opportunism have led to the Leader of the Opposition's attempt to claim credit?

David Willetts: The Secretary of State is welcome to intervene if he wishes to correct this account, but according to one newspaper, when the Prime Minister left Prime Minister's questions last week—

Madam Deputy Speaker: Order. The tenor of this debate is becoming very repetitious indeed. We are discussing Government new clause 34 and I advise Members to address their remarks to it.

David Willetts: After I have finished this point, Madam Deputy Speaker, I will indeed try to make some progress. There were specific accounts of the Prime Minister leaving Prime Minister's questions last week, phoning the Chancellor to ask why nothing had yet been done, and calling a meeting—

Madam Deputy Speaker: Order. I have already ruled on this. May we please discuss the new clause that is before the House?

David Willetts: I was responding to a challenge, but I shall of course follow your strictures, Madam Deputy Speaker, and try to make some progress. This issue is in fact very relevant to the new clause. Labour Members are saying that this campaign has gone on for a very long time and that they have pressed for action for ages. But whenever people have pressed for action—as we have done—the Secretary of State has always come up with the same sort of answer. In March, he said:
	"We are exploring with industry representatives the basis on which we can establish . . . the extent of the problem, the number affected".—[Official Report, 2 March 2004; Vol. 418, c. 764.]
	Earlier, in an Opposition debate in February, he said that it was
	"important to have a clear idea about how and where boundaries could be placed around those who would be eligible."—[Official Report, 24 February 2004; Vol. 418, c. 212.]
	We have already heard those answers, implying that the Secretary of State was doing lots of work behind the scenes to try to tackle the problem. If he has been doing all that hard work behind the scenes, why has he ended up with the new clause before us today? It does not answer any of the technical problems that he claimed he was busy addressing and studying. He could have tabled the amending provisions before us today a year or even two years ago. This evinces no progress whatever in tackling the problems or establishing the evidence, which he claimed was the only reason why amending provisions could not be tabled sooner.
	I understand why sometimes quick and dirty, and sometimes long, slow and carefully considered, amending provisions are necessary. This new clause, however, has been turned out very slowly, but it has not been carefully considered and offers no detail on the scheme—[Interruption.]

Madam Deputy Speaker: Order. There is far too much noise in the Chamber.

David Willetts: The new clause appears to have been cobbled together at the last possible moment, without answering any of the questions that the Secretary of State has told the House for the past 18 months had to be studied before he could take any action. The question before us now is why such a thin new clause has been tabled at such a late stage, and which does not answer any of the relevant questions.
	Let me put to the Secretary of State some of the questions that he has told the House for the past 18 months that he has been busy studying. First, we have heard various suggestions that he will restrict his assistance to pension rights accrued pre-1988 and to people who joined pension schemes pre-1988, when it was indeed possible for companies to make membership of a pension scheme compulsory. That was changed in the Social Security Act 1986 and after 1988 no one had to be a member of their company pension scheme. People may not have realised that there had been that change because their contract of employment may have appeared still to require compulsion. Is the Secretary of State contemplating some restriction so that the provisions would apply only to those who were compelled to join schemes or who built up rights pre-1988? That issue has been discussed for a long time, so can we have some indication of the Government's thinking?
	Secondly, what about the scale of the losses? Are the Government intending to provide more assistance for the people who lost most or are they thinking of targeting people with substantial losses? Will there be a minimum loss, below which people will not receive any assistance? That seems to me to be an elementary question to ask of any compensation scheme. Again, can Ministers please respond to that question?
	Thirdly, what about the use of the pension protection fund itself? I do not believe that the Minister for Pensions fully captured the purpose of our amendment. It is not our intention to make the levy in the PPF the basis for funding the assistance retrospectively. We fully understand that the new insurance scheme has to operate for the future. Our point is different. An institution is being established, which will deal with the assets of insolvent pension funds. I presume that some expertise will be built up to help people whose pension funds have wound up.
	The Minister referred to the obvious ways in which new help could be provided and mentioned the possibility of his Department setting up a separate institution. What he missed out from his list of possibilities was the most administratively simple way of proceeding—setting up a separate compartment within the overall structure of the PPF that would receive the Department's funding and take in the assets of the companies that are winding up their pension schemes, enabling them not to have to purchase annuities. We would like to hear more from the Minister about that. Such a body could then administer the assistance programme that he is announcing. I am genuinely baffled as to why Ministers are ruling out using an institution that is being set up by the Bill before us.
	I do not know why it is all so difficult. Is it because the Secretary of State, in broadcast media interviews, appeared to rule out the PPF being used in that way and does not want to go back on it? Is there any rational reason for inventing yet another institution when the Bill is setting up one that could easily be used for the purpose? We would be grateful for the Minister's guidance on that question.
	I would like more detail on the scale of the assistance. Let me offer the House some admittedly rough and ready or back-of-the-envelope figures. Here we go. The number of people affected is 60,000. That figure was first given officially by the Secretary of State in an Opposition debate on this matter earlier this year. The assistance to be provided amounts to £400 million. Dividing £400 million by 60,000 gives me a figure of slightly under £7,000 for every person affected.
	I am sure that hon. Members of all parties have had people at their surgeries who have lost that amount every year from the pension that they expected.

Dave Watts: rose—

Sandra Osborne: rose—

David Willetts: I shall just finish this point, and then I shall give way to the hon. Lady, as I have given way to the hon. Gentleman already.
	Each person will get slightly less than £7,000 in total over 20 years, but we know that many people have lost more than that every year. What sort of annuity would a capital sum of £7,000 buy? With luck, it might buy one worth £350 a year. That is nothing like the scale of financial loss faced by many people.
	The advocates of early-day motion 200 were not satisfied with our early-day motion 66, but they campaigned for full compensation for the people who had lost out. Many Labour Members put their names to that demand. Do they consider the package before the House today, given the sort of figures that are being used, to be anything like the full compensation that they requested when they subscribed to early-day motion 200? Perhaps the hon. Member for Ayr (Sandra Osborne) will comment on that.

Sandra Osborne: Some of us will want to press the Minister about the percentage that people can expect. Does the hon. Gentleman recall that in the Opposition debates to which he referred, he was extremely reluctant to commit his party to public expenditure of any kind? Now that he appears to support a rescue package, where would the Opposition find the money for it—in the very unlikely event that they became the Government—given the cuts that they intend to make?

David Willetts: The hon. Lady raises exactly the point to which I want to turn. The House, and those Labour Members who signed early-day motion 200, must accept that the Government are in a position of maximum political exposure. I think that they could have faced defeat in the House this afternoon, but they have come up with a package worth £20 million a year for 20 years, to be financed out of public expenditure. We can take it that that is the maximum amount that the Government are prepared to make available to help the people who have been affected. That falls a long way short of the amount of assistance that the announcement led many people to expect. I saw the photographs of ASW workers celebrating on Friday night. They raised their glasses to this great settlement, but I am afraid that, for many people, euphoria will turn to depression when they discover how modest the help is.
	As a result, either we have to call for more public expenditure—and I do not believe that we should—or we must turn to the other proposal that is on the table. It is an option that the right hon. Member for Birkenhead (Mr. Field) has raised before, and it involves using the unclaimed assets of banks and building societies to make the amount on offer a useful sum. I am clear that the sum of money proposed at the moment will not match the scale of the financial distress that people face, but I do not believe that there is any reasonable prospect that the Government will put in any more money.

Bill Tynan: The hon. Gentleman has been doing sums on the back of a fag packet. How much does he believe should be given in compensation or assistance to help the 60,000 people who have lost out? Will he clarify the Opposition's position with regard to retrospection? Does he believe that the Bill should contain a provision for retrospection?

David Willetts: The hon. Gentleman says that I am quoting figures that I have worked out on the back of a fag packet. I freely accept that they are rough and ready, but they are more detailed than anything that the Secretary of State has had to offer. The Department for Work and Pensions has worked on the problem for more than a year, but no practical evidence has yet been offered about the scale of the problem.
	It is very difficult for the Opposition to estimate the scale of the problem. We have been pressing Ministers about the 60,000 figure, which was offered by the Secretary of State when we asked him for an estimate of the number of people affected. Given that we have hit the limit for public expenditure on this matter, I believe that the only way forward is to increase the financial support for people who have lost out by using the unclaimed assets to which I referred. The Chancellor specifically referred to that in the Red Book this year. It states on page 116:
	"Where assets and owners cannot be reunited, it is also right that the assets be reinvested in society, as long as the original owners' entitlements to reclaim are preserved."
	The Chancellor has his eyes on that money, and the Irish Government have introduced reforms aimed ultimately at claiming unclaimed assets after 15 years.
	The House faces a problem today that is as serious as the problem we faced before. In some ways the problem is worse, because many people think—as a result of the announcement and the amendment—that their problems have been solved. Their problems have not been solved. Therefore, either we need yet further public expenditure or we should use the unclaimed assets, and I favour the latter approach.

Kevin Brennan: Does the hon. Gentleman acknowledge that his calculations assume that all those involved will retire on the same day? The key to the amendment is the ability to take the assets in the pension funds in question and to use them more effectively than simply by purchasing annuities, in order to build a fund. The hon. Gentleman is being slightly misleading in his calculations. As for early-day motion 200, the word "full" does not appear in it.

David Willetts: The hon. Gentleman has been very active on this issue and I would be interested to know whether he regards the new fund as sufficient to address the problems that he has identified. If he does not, what does he think would be a better way forward? I am trying to help him, and other Members on both sides of the House, to identify that. [Hon. Members: "Answer the question!"] I shall answer his question. I agree that it would be much better to continue a scheme rather than to wind it up and require the purchase of an annuity or deferred annuity. Ministers have still not made it entirely clear that they are committed to that course of action, but I agree that it would be better. Indeed, it is something that the pension protection fund will do in future. It is another argument for supporting our amendment.
	We will set up one institution under the Bill that will take over the assets and liabilities of pension schemes in wind-up in future, so why does not the hon. Gentleman support our amendment that would add a separate compartment to the PPF to do that for schemes that already have a problem and are in wind-up? I agree with him, but his point is another argument in favour of using the approach that we set out in our amendment.
	I know that many hon. Members wish to speak, and I have taken several interventions, but I wish briefly to touch on the Liberal Democrat amendment. It would tackle perhaps the greatest single omission from the Government's announcement—to which the Minister briefly referred—which was the issue of solvent wind-ups. Many hon. Members will have been approached by constituents who have been victims of solvent wind-ups. For example, I have constituents who were employees of Ballast UK. They lost out, but they will receive no assistance under the Government's announcement because the parent international company is solvent. That also applies to former employees of the Dalgety group and a Japanese bank in the City.

Andrew Selous: Will my hon. Friend comment on the fact that it is curious that Ballast Wiltshire continues to be able to trade in the Netherlands, despite having so short-changed its UK employees? Does he agree that there is a case for the European Union to look much more seriously at companies that defraud their pensioners in one member state but continue to trade elsewhere in the Union?

David Willetts: The issue first got on to the front pages with Maersk, although that company changed its mind and decided to support the company pension scheme. Maersk would not be covered by the provisions in the Government's amendment, and my hon. Friend makes an important and interesting point.

Bob Spink: Will my hon. Friend add to his list the Bradstock group, where there was a solvent wind-up that affects many of my constituents? They feel that the Government's treatment of them is terribly unfair.

David Willetts: My hon. Friend gives another good example of solvent wind-ups that are not covered by the Government's new clause. The purpose of the Liberal Democrat amendment is to cover such people and I fully accept that there was a serious omission from the announcement.
	I put the same question to the Lib Dems and to Members on both sides of the House: on what basis might we help the victims of solvent wind-ups? We should help them, and using unclaimed assets is the only feasible or practical way to do so. If the hon. Member for Northavon (Mr. Webb) can assure us that that would be possible under his amendment, I will look at it sympathetically. What I am not clear about is whether he envisages that the solution is higher public expenditure and, if so, how spending more public money in this case would be consistent with various statements from Lib Dem economic affairs spokesmen about their tax and spending plans. I have never found a reference in those statements to spending more money on the victims of pension wind-ups.
	I have looked through the list of Liberal Democrat spending pledges and the victims of pension wind-ups do not appear, although I should be happy to go through the list with the hon. Gentleman because I hesitate to suggest that he may be proposing something with which his colleagues may not agree. As I cannot see help for the victims of pension wind-ups among the Liberal Democrat expenditure pledges, it would be helpful to know whether he regards his amendment as such a pledge.

John Redwood: Is my hon. Friend advising us to support spending £400 million of public money? Is he advising us to support the outline Government scheme, or is he suggesting that the money is inappropriate, that the scheme will not work and that we should, therefore, be against it? I am not quite clear which advice he is giving us.

David Willetts: I am sorry that my right hon. Friend has not found that my comments over the past 27 minutes answered all the questions he may have had about the Government's proposal. The real problem is that we know very little about their proposal. I welcome the £400 million that has been put into the scheme and I am proposing extra assistance, which would not be public money but would use the unclaimed assets of banks and building societies. That would be a constructive way forward that would involve no increase in public expenditure.

Alan Howarth: The hon. Gentleman has indulged in a variety of expressions of sympathy this afternoon. He has indicated that he would not rule out the possibility that it might be appropriate for assistance to be given to the victims of Equitable Life and to the victims of solvent wind-ups. As I agree that there is not the remotest fiscal scope for providing adequate help to all those deserving cases, how is it to be afforded? He suggests that the unclaimed assets will provide what is necessary, but is he not at risk of spending that nest egg several times over?

David Willetts: The House may not face the decision today, but I am sure that as the penny drops about the very limited scale of the Government's announcement Members on both sides of the House will have to decide whether to explain to their constituents, "This is all there is and there is no more", or whether we should aim to do more. I do not claim that we could give 100 per cent., and we certainly need to see the figures. We are still waiting for Ministers to provide them. The money from unclaimed assets that the Chancellor identified in the Red Book would enable us to do more and we could plug a large loophole in what the Government have announced today—namely, the position for victims of solvent wind-ups. That is the proposition that I am putting to the House.
	I have two final points about the lessons that we should learn from this unhappy episode. The first is on compulsion. Although I give less weight to it than Labour Members, one of the arguments that has been used is that people are entitled to compensation because they were obliged to join a pension fund. That raises questions about whether it would ever be conceivable to embark on implementing the proposals made by the Secretary of State 18 months ago for forcing people to save. If compulsion is to be used as a basis for Government liability when things go wrong, it seems to me that Members who are using the compulsion argument on this occasion will make it much more unlikely that a future Government would ever be willing to contemplate compelling people to save in any form. I should be interested to learn whether the Secretary of State or the Minister can envisage that Adair Turner, who has been commissioned to look into compulsion, would really make proposals, which they would accept, for compelling people to save, if when people were compelled to save we faced the arguments about Government financial liability that have been put today. That is the first lesson for the future.

Rob Marris: Is not the hon. Gentleman setting up a straw man? Most of the compulsion that has been discussed has been based on models such as the Australian scheme where there would be compulsion to save in a money purchase scheme. The new clause offers no hope of financial assistance for people in the UK who were forced—as some employees were before 1988—to save in a money purchase works pension scheme.

David Willetts: The hon. Gentleman may not be fully reflecting Adair Turner's commission. Nothing in the original statement said that he should look only at compelling people to save in money purchase arrangements; the remit was much wider than that.
	My second point on lessons for the future is directly addressed to the Minister of State. Another reason for the obligation we face, to which the hon. Member for Cardiff, West referred—as have I on several occasions—is that people were led to expect that in some sense the money in their company pension schemes was safe or guaranteed. May I, therefore, quote to the Minister some of the things that he and his Department have been saying about the PPF?
	A DWP fact sheet published at the same time as the Pensions Bill states that
	"members can be reassured they will still receive the core of the benefits to which they are entitled".
	In Committee, the Minister said that people's pension rights "will be safeguarded" and that
	"they will get 90 per cent."—[Official Report, Standing Committee B, 30 March 2004; c. 483–88.]
	That is 90 per cent. of the pension they were entitled to expect. With the PPF, the Minister and the Secretary of State are in danger of repeating exactly the same mistake that was made on company pensions. They talk about the fund as though it safeguards, reassures or guarantees, yet we all know that without the Government standing behind it and without the rate of levy that has been suggested, it can offer no such guarantee.
	The Minister chose his words unwisely on several occasions in Committee when he was referring to the PPF. If ever the fund cannot provide the 90 per cent. that has been promised, the Minister has already said sufficient for future Members to come to future debates in this place and say that Ministers told people that they would get their 90 per cent. We should all be careful about the words we use when talking about pensions and I am sorry to say that Ministers have not been careful when talking about the PPF in our debates on the Bill.

Jenny Tonge: On a point of order, Madam Deputy Speaker. Have you received notice from the Foreign Secretary that he will come to the House to make a statement about the deteriorating situation in Gaza? We now have confirmed reports that in the last hour the Israelis fired missiles from jet fighters into a peaceful demonstration in Rafah. It is reported that about 20 people were killed and more than 40 were seriously injured. The demonstration was peaceful and had been organised to protest against house demolitions. Many, many women and children were involved.
	Is it not time for the Foreign Secretary to come to the House and tell us his plans for action against the Israeli Government—not just fine words of disapproval?

Madam Deputy Speaker: I have received no such request. Clearly, the hon. Lady's remarks are very serious and Members on the Treasury Bench will have heard what was said.

Frank Field: I rise to speak to amendments (d) and (e), which stand in my name and that of my hon. Friend the Member for Sittingbourne and Sheppey (Mr. Wyatt).
	Today is a great day; it is a day of celebration. It is a day that many of us thought that we would not see. The heroes of today's events are sitting below me on the Treasury Bench. Of course, we wish to pursue issues about how complete the compensation fund will be, but we also know that the Freedom of Information Act 2000 will allow us to ask for policy papers on issues of public concern from 1 January next year. So when I ask for the papers on 1 April next year, on the whole saga of trying to get justice for those workers who lost their pension funds, I have no doubt whatsoever that riding on white chargers from those papers will be my right hon. and hon. Friends who are now sitting on the Treasury Bench. We will be able to celebrate their success then, as we are celebrating it today. Of course, I am sure that that will not affect how they view these issues as we finally see this matter through to the statute book. I am sure that, as decent comrades, they will ensure that other Ministers know that a lot of us will be pressing for the policy papers and to know who said what and who does what in the final stages of the analysis.
	I also want to compliment those on the Treasury Bench on their confidence and on the graceful way they have approached the debate—there has been nothing of trying to be too clever about it; there has been no arrogance about it—for it is now two and a half years since I was trying to put on the statute book a Bill that covered all these issues and more, and those on the Treasury Bench were blocking it. Of course, we now know that they were spending almost every minute of the day trying to find answers to all the questions that we have been posing. What have we experienced? We have not had clever little Dicks jumping up, reciting answers to all the questions that we have been posing during the past two and a half years. They have been nonchalant; they have been laid back; and they have been careful. Indeed, they have not bragged at all that they have done one iota during the past two and a half years. So I want to thank those on the Treasury Bench for the real stature of their characters, which have been on such good display during the debate.

Edward Garnier: I, too, should like to join in the congratulations that the right hon. Gentleman is showering on his right hon. and hon. Friends. When he gets access to those policy papers next April, will he be sure to bring with him a carbon-dating machine, so that he can check the age of the pieces of paper on which those policies were written?

Frank Field: Those people with hearing better than mine will already be hearing the machines at work, shredding various papers that will not be part of the record. That was trying to be humorous; those on the Treasury Bench must not be too worried about that.
	The reason why I proposed my Bill more than two and a half years ago was that I have constituents who lost out heavily in the closure of their company. Those constituents worked in the constituency of my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller). Not only has he endlessly raised the issue, along with me, but whenever I have made such moves—albeit as a Parliamentary Private Secretary, which usually prevents him from signing such motions, Bills and so on—he has always signed those measures.
	I am not anxious therefore for new clause 34 to be passed, unless the reason why I became interested in the issue—the position of those constituents—is met, but another issue is as important as that of those constituents. The first pension scheme that attracted the attention of the House was the closure of the Belling scheme in Burnley. My hon. Friend the Member for Burnley (Mr. Pike) is not here, but all hon. Members know that candidates of all parties are facing the most serious challenge from the National Front in Burnley.
	Are we so naive, so idiotic, so proud and so boastful that we will let a measure go through from which, given what the Minister for Pensions has said, those workers will be excluded? Those workers are largely working-class, male and disfranchised. Is that the message that the House thinks it should send to Burnley in the middle of fighting elections against some of the nastiest people in the business? So when we come to deal with amendments (d) and (e), we need a clear statement from the Minister. He is wrong to say today that the worry about the measure is who may come in from earlier years. That is not the worry. We know most, if not all, the people who would qualify if we ensured that there was no starting date for the new compensation scheme.
	The worry is that employers will try to dive-bomb the scheme and drop very large liabilities on to it before it commences. So I hope that we will not have to press amendments (d) and (e) and that the Government will say that they take on board the fact that their one defence against other Labour Members and against helping, for example, Equitable Life is that those workers were compelled to join. Workers from H. H. Robertson in Ellesmere Port were made to join. Workers at the Belling factory were made to join. Therefore, if words mean anything, surely what the Minister for Pensions has spoken about today will cover those workers.
	The numbers that will be covered are minuscule compared with the 60,000 that the Government have estimated. So I make a genuine plea—it is a plea not to unbalance the scheme, but for natural justice. If we go ahead with the scheme and exclude small handfuls of our colleagues elsewhere in the country, some of them will become so desperate and do the most awful things to themselves and perhaps their families, as a result of the actions that we take today. I beg the Government to tell us clearly before we deal with the relevant amendments that they will be serious in moving an amendment in the other place.

John Redwood: The right hon. Gentleman has fought a valiant and honourable campaign to get this far. Does he think that £6,700 per person, on average, will be a big enough capital sum? My hon. Friend the Member for Havant (Mr. Willetts) says that it would buy £350 a year. At most, it would buy £500 a year, on current actuarial tables. Does the right hon. Gentleman think that that is enough; or does he wish that those on the Treasury Bench would come up with a better solution?

Frank Field: No, of course, I do not think that sum enough. If I had been a little quicker when the Secretary of State for Work and Pensions asked me to withdraw my clause—in fact, it was tabled by my hon. Friend the Member for Sittingbourne and Sheppey—I should have said, "I will do so on condition that you give Government time for the Bill on unclaimed assets that I introduced a couple weeks ago." Of course, £400 million is not enough. If anything, I am critical of the Government coming up with £400 million. Why should our hard-pressed taxpayers, who are earning away, contribute £400 million, when we could use the large sum that has been lying idle, sometimes for 100 years or more?
	I make a plea to the Government. It might go down well among Labour Members to say that the industry should make a contribution. If the Government are serious in that, they are in danger of having their sanity tested. We have charged the industry £5 billion a year in extra taxation. If we think that those who have done well by their schemes to ensure that they are not in deficit will now come up with even more funds to keep someone else's scheme going, we are living in cloud cuckoo land. So by all means make that point if we want to make a party point, but please do not be misled by one's own rhetoric into thinking the industry will come up with the money to save us on this one.

Dave Watts: Does my right hon. Friend agree that the Government today have not accepted liability for the problem, but put in some money to try to restore some confidence in the insurance industry? Surely he would agree that it is in the interests of the insurance industry to do the same, to find some resources and to boost the amount of money available to that vulnerable group.

Frank Field: As we both come from Merseyside, I am always loth to disagree with my hon. Friend, but I am afraid that I do. The Government have not put any of their money into the scheme. Instead, they have put some of our workers' money into it. So they are using taxpayers' money. It is wonderful that they have made a move to start the fund at £400 million, but it is not their money: it is our constituents' money. Our constituents are also contributing to a pension scheme which, thanks to the Bill, will now be protected not only to a large extent, but for the first time. That is great.
	I would love to see the Pauline conversion of this country's financial institutions, but although I hope that I have a long life ahead of me, I do not think that I will live long enough to see that. We have to get other sources of funding, before the general election, if we are to avoid the disgust and hatred of many of our constituents. It is a great start, but in no way are the funds sufficient.
	I hope that the Minister will tell us that the Government will find Government time for the Balance Charitable Foundation for Unclaimed Assets Bill. The hon. Member for Havant (Mr. Willetts) was right to quote the Red Book. The original Bill for winding up pensions stated that we should pay for deficits by using unclaimed assets. The Chancellor moved those unclaimed assets to a new foundation, the Balance Foundation. That Bill has all-party support. The first charge on that new foundation should be to pay these pensions.
	Although it is a challenge for the Government, it is also a challenge for the Opposition. They have said that they support using the huge resources in unclaimed assets to ensure that we do not run amok yet again with people's hopes and expectations of a good payout. I put it to the hon. Member for Havant that if the Government do not find time in their programme to ensure that the Bill on unclaimed assets gets to the statute book, will the Opposition attempt to find a way to adapt the procedure of the House? Instead of having a rant from them—whatever the rant of the week might be—perhaps we could use one of their Supply days to have the Second Reading of the Bill to push it on its way.

David Willetts: The right hon. Gentleman asks me a specific question. We have considered that idea, and it is an ingenious suggestion. It is my understanding, however, that such a debate would appear to be a Second Reading, but it would not have any legal force in practice. It would not be a real Second Reading, but a copy. Although it would be an interesting way to ensure that that important matter is debated, sadly it would not help his Bill on its way. However, it would be an opportunity for us to show yet again how much we support his particular idea.

Frank Field: If the Opposition spoke more to the Clerks, they might find that the motion on the Order Paper would come very close to a Second Reading motion. More importantly, it would flush everyone out because we would have a vote on whether hon. Members give that priority to unclaimed assets. I leave that with him, as I leave it with my hon. Friend the Minister.
	I support the Liberal Democrat amendment (c). It is immensely important that at this stage of the debate, when the ink is not yet dry on the Government's new clause, we apply as much wisdom as possible to determining how we can protect as many people as possible. Those people have done what every Government told them to do—to save and be independent in their retirement—and thought that they were doing the right thing. They have found, however, through no fault of their own, that future wickedly grabbed from them. We cannot let them down.

Bob Spink: Does the right hon. and highly respected Gentleman believe that the unclaimed assets could be used to compensate those people who were victims of solvent wind-ups, such as the Bradstock Group plc, which affected people in my constituency?

Frank Field: I do. Those people should be included in the scheme.
	Although some of my comments were technical, I hope that for the first time I have been slightly humorous. It is difficult to be humorous in this place if people think that you are not. Neil Kinnock only had to stand up and everyone started laughing. I was pushed into the House by the deputy Chief Whip one day and told to speak. I did not know what the debate was on, and only realised when someone intervened on me. When I got to my feet, I said, "Mr. Speaker, I record reading over the weekend in one of the supplementary volumes to a book on Churchill's life that friends of his were approaching the garden house at Chartwell when they heard the great man say, 'Mr. Speaker, I didn't expect to catch your eye today.' I, Mr. Speaker, did not expect to catch your eye." Not one hon. Member laughed. I am pleased if I managed to put smiles on the faces of Front-Bench spokesmen today.
	I do not want my remarks to detract in any way from my thanks to the Government for tabling new clause 34 and to the Ministers for the difficult negotiations that they entered into in order to convince their colleagues that it was the right thing to do. Many of our constituents must have given a big cheer for them. I wish to add my cheer to theirs.

Steve Webb: When the right hon. Member for Birkenhead (Mr. Field) began, I thought that he was giving a whole new meaning to the term "wind-up".
	The new clause is a breakthrough. It is the first time that the Government have accepted that it is legitimate to use taxpayers' money to help people who have lost their pensions. It is entirely welcome and I hope that every hon. Member will support it. I hope the House will note the lack of a "but" at the end of that sentence, although there will be one later.
	The fact that the new clause exists at all is a tribute to a large number of people. I am not going to turn this into the Oscar ceremony, but the workers and trade unions who have been affected by these issues campaigned tirelessly and deserve great credit. Dr. Ros Altmann, who has not been mentioned in this debate but has in many others, made a huge contribution. She applied her expertise, commitment and compassion in equal measure and brought credibility to the campaign in a way that I have seldom seen before. She deserves huge credit for that.
	Many hon. Members also deserve credit. In particular, the hon. Members for Cardiff, West (Kevin Brennan), for Sittingbourne and Sheppey (Mr. Wyatt), for Ayr (Sandra Osborne), the right hon. Member for Birkenhead and others were successful in campaigning on the matter. I have said in other contexts that the hon. Member for Cardiff, West has bored for Wales on the subject. Speaking as someone who was described in the press this morning as a "nerd", I can think of no higher compliment.
	The new clause is an important step forward. It is worth reminding ourselves of how far we have come by reflecting on just one quote. The hon. Member for Sittingbourne and Sheppey has raised the subject many times, including in an Adjournment debate in mid-October 2002. In that debate, the then Minister for Pensions, the right hon. Member for Makerfield (Mr. McCartney), said:
	"My hon. Friend has called for an ex gratia payment to be paid into the pension scheme. I would not like to give him false hope. Indeed, I cannot give him any hope. The Government are not able to assist schemes in wind-up that are underfunded."—[Official Report, 16 October 2002; Vol. 390, c. 441.]
	That shows the magnitude of what has been achieved, which is to the immense credit of every hon. Member who has pursued the problem doggedly.
	We still do not know what we do have, however. The critical point, and we cannot let Ministers off the hook on this, is whether what we have is a hardship fund—a bit of charity because we feel sorry for those people—or a compensation scheme. The distinction matters. If we are to talk about who should be included, how much they should get and when they should get it, the basis on which we are to pay out that money matters. In my judgment, the new clause needs to be about more than a hardship fund.
	Why is there a case for more than just a bit of money, in this case £400 million over 20 years? Why is there a case for more than tea and sympathy and £20 million a year? It is because we are talking about people who have paid into their pension for 40 years but got next to nothing. ASW transferred 30 years' worth of miners' pensions into its fund and lost the lot, because a distinction was not made between money transferred in and money that was there all along. That is not right, and it is not just a question of extending sympathy to people in that position, as I shall explain. The system makes provision for a guaranteed minimum pension—a legal term originating in Government statute—but in that case the guaranteed minimum pension was not guaranteed. The Minister for Pensions made an important point when he said that the Government propose that compensation will apply only to schemes that were wound up from 1997 onwards. It was in 1997 that the Pensions Act 1995 came into force. If the financial assistance that is being offered has nothing to do with Government and is just charity, why is it being offered from the date at which an Act of Parliament came into force?

Dave Watts: The Government have made it quite clear that the scheme does not offer compensation. They have resisted the notion of liability and have proposed a hardship fund. Do the hon. Gentleman's comments not make it more difficult to try to convince the Government to do something similar in future, because everyone will line up trying to find criteria to extend the help given to a particular group?

Steve Webb: I do not accept that. We need to ensure that justice is done, but we will not do people who have suffered an injustice any favours if we ask them not to make a fuss about their case because that may prevent other people who have suffered an injustice from getting handouts. That is not a basis on which to draw up a scheme. The Government have asserted that the scheme is effectively a hardship fund, but payment should be made on a basis that dictates certain things about the level and structure of payments.

Andrew Miller: I would like to correct the hon. Gentleman, as the Pensions Act did not come into force in April 1997. It came into force in part when Royal Assent was given on 19 July 1995. "Butterworths" has 26 pages on the detailed provisions that came into force then. There are arguments for drawing a line at any one of those 26 pages, but I would urge the hon. Gentleman to agree with my analysis that either there should be no cut-off date, or it should be the date when Royal Assent was given.

Steve Webb: I understand why the hon. Gentleman has made that point. The Government chose 1997 as the cut-off date because the changes in the order of priorities on the winding-up of schemes came into force then. It was in 1997 that trustees lost the discretion to divide an inadequate pot more fairly, but it was Government who changed the rules. However, I know where the hon. Gentleman is coming from, and I have a lot of sympathy with the amendment tabled by the right hon. Member for Birkenhead specifying an earlier date.
	In 1997, statutory instruments removed employers' obligation to warn of insolvency risks. Because the 1995 Act had been introduced and there was a minimum funding requirement, employers' obligation to tell their workers that the pension fund was at risk when the company was in danger of becoming insolvent was removed by Government. A trail of responsibility starts to emerge, so this is about more than having sympathy for those employees—it is about justice, which is a key distinction.
	The hon. Member for Cardiff, West mentioned the Financial Services Authority, which was set up by Government. In a guide to pensions headed "Reasons for joining an occupational scheme if you can" it said:
	"In a final salary scheme you know broadly how much pension you'll get. This makes it easier to plan for retirement".
	The Green Paper that the Government produced in December 2002 said on page 55:
	"Accrued rights . . . are clearly protected under pensions legislation and this will remain the case".
	Some people are getting nothing, when the Government were telling people only 18 months ago that their rights were protected.
	"Occupational Pensions: Your Guide", a document produced in 2003 by the Pensions Service for the Department for Work and Pensions, told people who wanted to know how they could be sure that their money was safe that they were
	"protected by a number of laws"
	and that the regulator could
	"act quickly to protect your interests".
	Successive Governments do not have clean hands on this issue. The regulator, set up by the previous Government in the 1995 Act, issued a guide to trustees which has since been withdrawn. However, it said that the Act
	"was intended to increase the security of members' benefits".
	It talked about the minimum funding requirement and said that it was
	"the minimum amount . . . that should be in the scheme at any one time . . . to meet the scheme's liabilities if it were to be discontinued".
	However, schemes that met that requirement did not have enough money to meet those liabilities. The regulator was issuing erroneous information to trustees, and the Government, too, are not completely blameless.
	The National Association of Pension Funds is not part of Government, but it issued documentation saying that the schemes were safe. It is reasonable to claim that as Government are part of the problem, more than just charity is required.

Nigel Waterson: I am following the hon. Gentleman's arguments closely. Does he share my surprise that in cobbling together a deal the Government have not obtained a firm undertaking that the European Court case will be withdrawn? Does that not mean that in due course they could put this package in place, the detail of which is still sadly lacking, but end up paying much more if they lose that case in the European Court?

Steve Webb: I do not share the hon. Gentleman's view. Because this is about justice, if the unions' claim is tried in the courts and they are successful they have every right to pursue it, and should not bought off by this package. I am not suggesting that they were asked to give up their claim, but I do not believe that they should do so.
	There are the hands of successive Governments all over this issue. Many of us have had to rely for information on the press, who were briefed by the Department, and the workers. Last night, I went across the road to meet the Dexion workers who were holding a vigil by candlelight. They asked me how much they would get, as it is still far from clear what they will receive. We have queried the difference between the £400 million fund offered by the Government and the cost of full cover, which is estimated to be more than £2 billion. In the Financial Times today, a Government spokesman said that
	"we are not in the business of paying full compensation. What we are talking about is assistance. We are not guaranteeing anything."
	That last sentence is critical. Even today, the Government cannot say what sums are available, so people do not know where they stand.
	There is a big gap between the figure of £400 million to be paid over 20 years, equivalent to £20 million a year, that the Government have come up with and Dr. Altmann's estimate of £76 million to be paid over 30 years, or £2 billion in total. We do not know the precise figures, but there is clearly a big shortfall, giving rise to problems of timing, cover and level, the subjects of our three amendments. Amendment (a) deals with timing and says that payments should be
	"made within six months of the coming into force of this Act".
	We tabled the amendment last week to try to get the Government to say something on the record and stop the date drifting. We have received some reassurances from the Minister, who said that a scheme would be in place this time next year. If things are ready to roll then, it would be about six months after the measure comes into force, so we shall not seek to press amendment (a) to a vote.
	Cover is a problem, though. If the true cost of covering the 60,000 workers is £2 billion-plus, but the Government are offering only £400 million, there must be big exclusions, including people who work for solvent companies. The Government have prevented that problem from arising in future, because they have introduced provisions which, from last June, mean that solvent employers cannot close a scheme unless there is enough money in it. I hope that amendment (b), which the right hon. Member for Birkenhead tabled to our amendment, is not necessary, but there are cases historically in which people have been members of schemes closed by a solvent employer, where the minimum funding requirement was satisfied but there was not enough money in the fund to pay people full pensions. Those workers are as unfortunate as people who work for a company that goes bust, and should have the same rights as them. If people work for a solvent employer and the scheme is closed against their will, they have not suffered less injustice than people whose scheme is closed because the employer goes out of business.

Frank Field: The hon. Gentleman says that he hopes my amendment will be unnecessary and will not be pressed. Will he put that question to the Government, to ensure that his interpretation is the same as the Government's interpretation of what the law will be, which will make my amendment unnecessary? If the Government cannot give that assurance, he may think my amendment is necessary.

Steve Webb: Yes. To sum up on that point, my understanding is that no new solvent employer can now close an underfunded pension scheme because of what the Government legislated back to 11 June, so if we include solvent employers in the financial assistance scheme, there is no danger that new solvent employers will close their schemes, as the Government have separate provisions to prevent that from happening. That is my understanding of the implications of our amendment. It would be helpful if the Minister could confirm that when he responds.

David Drew: The hon. Gentleman will know that I am about to raise the issue of Lister-Petter, whose employees he shares. The decision may not be taken by the employer. Where there is an administrator, it may be the administrator who takes the decision on the pension fund. If there is no suitor willing to come in and take over the company, including taking over the pension fund, an insolvent pension fund will have to be closed. I shall seek clarification from those on my Front Bench, but I should be interested to hear the hon. Gentleman's views on that circumstance. It could be doubly unfair to the work force, who could be losing their jobs, as well as their pensions.

Steve Webb: That has always been the infamous double whammy that people suffer in such cases. They lose their job and, to add insult to injury, they lose their pension as well. The position of solvent employers, parent companies, sub-companies and so on needs looking at. If the Minister can assure us that the Government do not intend to put the solvent employer cases into the present financial assistance scheme but they have other plans to right that injustice, we will not pursue amendment (b) either. In other words, we believe that people who work for solvent employers have suffered a real injustice and it needs tackling. If the Government think there are good reasons why that cannot be done through this scheme but they have plans to do something about it through some other mechanism, that will offer us the reassurance that we seek.
	Amendment (c) is critical and comes to the heart of the issue. It states that the level of compensation that people get should match what people will get next year through the pension protection fund. We must remember that that is not full compensation. There are many, Dr. Ros Altmann among them, who say that we are being too soft and that 90 per cent. is not enough—it is a case of injustice and theft, and the figure should be 100 per cent.
	We are not going that far. We are asking, "Why should someone who loses out because their employer became insolvent on 31 March next year get perhaps substantially less than 90 per cent. of their pension, while someone who loses out on 1 April gets 90 per cent?" Why should there be that arbitrary distinction? The Minister seemed to say it was because the employer had paid into the levy—into the fund. Where is the case in justice and morality for that distinction? Those are people who have saved all their lives, who have done what they were told, and who have lost out. It is not acceptable that those workers should get less than the amount they would get under the pension protection fund.
	The worry is that the figure may be not just a little less than 90 per cent. If the figure of £400 million, compared with £2 billion or something of that order, is right, we could be talking about only half pensions or one third pensions. That would be unacceptable, so we feel particularly strongly about amendment (c), which specifies the level of benefits. The workers over the road and the ASW workers who were celebrating on the television news thought they would get most of their pensions back. It would be a cruel deception. All the way through, the Government have spoken of not creating false hope. It would indeed be creating false hope if workers thought last Friday that they would get their pension pretty much covered, and if it turned out that they would get only half or thereabouts of their pension covered.

Andrew Selous: Will the hon. Gentleman give way?

Steve Webb: I will not, as I shall try to conclude.
	There is a real urgency to the issue. I am told that there are already ASW widows. Members of the ASW scheme have, sadly, died and the widows still do not know what widows' pension they will get. That needs to be sorted out soon. We need clarity. We need these matters to be resolved urgently.
	Because we consider the issue to be a matter of justice, I conclude with some words from Andrew Parr, who has been one of the leading figures in the Pensions Action Group. I tried to get his permission to quote him, but I was not able to speak to him today. I am sure he will forgive me for quoting him. Having seen the Government's new clause 34, he said:
	"Our aim is not to discriminate between groups. Every affected person should have full restoration of their pension entitlements regardless of company, regardless of date of joining the scheme, regardless of the reason for the scheme wind-up, regardless of length of service and regardless of age."
	He continues:
	"Nobody told us of the risk we were taking, not the Government, not the FSA, or OPAS, or OPRA, or the NAPF, or our employers. All led us to believe our pensions were safe, guaranteed and protected by law.
	We only want what we were promised. Surely that is fair."
	This is not about charity. It is about justice, and that should be the basis for payments from the fund.

Kevin Brennan: The hon. Member for Northavon (Mr. Webb) said that I had bored for Wales on the issue of occupational pensions. May I return the compliment and say that he has nerded for Northavon throughout our debates?
	I begin with a comment about the people whom I have tried to represent in our discussions. My hon. Friend the Member—I call him the learned Member; I know that is technically not in order, but he is a professor—for Aberavon (Dr. Francis) yesterday gave me a badge that his late father, Dai Francis, who was a distinguished trade union leader in Wales, had in a drawer at home. The badge says, "Steel must stay in Cardiff". As the hon. Member for East Carmarthen and Dinefwr (Adam Price) will know, it dates back to the 1970s, when there was a campaign by some of the same people whom I have been representing. At that time, they were working in a nationalised industry—the steel industry—and certainly thought their pension was guaranteed. Some of them are now close to retirement age.
	Those workers are tempered by the heat of battle, as steel men should be, rather than put off by it. That is why they have been so durable in fighting the battle. It has helped me in trying to take up the campaign, along with many other hon. Members, a large number of whom are in the Chamber this afternoon. They are too numerous to mention, but all have made an important contribution.
	New clause 34 represents an astonishing victory for the campaign that those workers and workers from other companies around the country have waged on the issue. It is a testament and a compliment to the dignity, steadfastness and solidarity—if I may use some old-fashioned words—shown by the workers who have been faced with the problem. It is a good example of why it is important that people join trade unions. Many of those people were members of trade unions and their trade unions were able, for example, to collect funds, possibly to take a legal case to court, if necessary. That could not have happened if they were not members of trade unions, and it shows the importance of trade union membership.
	I have worked closely with the Iron and Steel Trades Confederation and also with Amicus, but other trade unions have been involved. In addition to showing the importance of trade union membership, the campaign has also shown the importance of having a Labour Government. Instinctively, the Government have understood the issue—a difficult, complex issue that they have had to deal with. They have instinctively understood it from day one and have not shut the door on doing something that some people said was impossible at the beginning of the campaign—to get retrospective assistance for those who have been affected.
	I pay tribute to the Secretary of State, to the Minister for Pensions and his predecessors, to the Prime Minister for the interest he has taken in the issue, and to the Chancellor, who has disproved one of Churchill's sayings. My right hon. Friend the Member for Birkenhead (Mr. Field) earlier quoted Churchill. Another of Churchill's sayings was that the Treasury was the inverse of the Mr. Micawber principle: instead of waiting for something to turn up, the Treasury was waiting for something to turn down. In this case the Treasury has come through and should be complimented. A compliment is due to the Chancellor for his role in bringing about the new clause before us, which permits the Government to use public funds in order to deal with the matter.
	I have said all along that I did not mind where the funds came from. I said that in Committee. Unlike some colleagues, I think it is entirely proper that money from general taxation should be available for such purposes. The scheme is right for three basic reasons.

Nigel Waterson: I confirm that the hon. Gentleman said in Committee that he does not mind where the money comes from. Before he moves on, is he satisfied that his constituents, whom he has valiantly represented in discussions and debates, will be fully compensated? If not, is he satisfied by the compensation that they will receive?

Kevin Brennan: I accept that it is not possible to say that full compensation will be paid, and I have never used those words—as the hon. Gentleman, who listens carefully, knows. I am satisfied that the measure is a major breakthrough that will provide significant sums to pay substantial compensation. If that compensation is cleverly combined with the available assets, a significant level of assistance—I should not use the word, "compensation"—should be available. If someone had offered my constituents significant assistance when we started the campaign two years ago, my constituents would have bitten their arm off. I accept that a lot of detail must be worked out, and people are understandably anxious because they want to know what they will get.
	The measure is not about fobbing off people, buying off people or fooling people. Indeed, such an approach would not work because workers, other hon. Members and I would return to the issue, and the trade unions would pursue their legal case under the European insolvency directive—that possibility remains if substantial assistance is not made available. I believe that substantial assistance will be made available, although I accept that a lot of the detail must be worked out. The possible legal obligation on the Government under European Union law to protect pensions is one of the three reasons why the measure is right.
	The moral obligation to act has been discussed in great detail, and it is not good enough to argue that the matter concerns hard luck. If someone pays into a defined benefit scheme, the scheme's nature means that a pension promise has been made. It is not good enough to say, "We can all walk away. Hard luck if you have worked for 40 years in a company and your pension is taken away from you at the last minute."
	It is in the public interest to make the Bill a success. As the Minister says, a cloud has hung over the Bill, which is, incidentally, among the most progressive pieces of legislation to pass through this House for many years. The Bill is about security. The Labour party was invented to provide social security for working people, and that is its fundamental purpose.
	The Bill is in the public interest, because some 60,000 people—we will not know the true figure until people come forward—will not go round saying, "Don't believe that the Government will help to protect your occupational pension. Don't believe that your pension is safe, because look what happened to us." If we assist those people, they will say, "We were worried that we would lose our pension, but, at the end of the day, the Government"—in this case the Labour Government—"would not permit that to happen."
	We have discussed in detail the difference between occupational pensions and cases such as Equitable Life. One can sympathise with people whose expectations are disappointed, but that is very different from a pension promise backed up both by the permission of compulsion by the state and by the fact that the state, through its agencies, told people that their pensions were secure and guaranteed. When someone chooses to invest in a company, their expectations might be disappointed, but they have not lost a guaranteed pension that they thought would be based on their final salary.
	Some questions of detail must be settled, and I am pleased that the Minister set out a clear timetable to resolve some of those issues. I am sure that hon. Members want to raise questions such as the exact point at which the assistance starts, and my right hon. Friend the Member for Birkenhead and my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) are particularly concerned about that point. I am happy with the Minister's comments on that issue: he has not said that the point at which assistance starts is written in stone and, importantly, he is prepared to consult.
	The various definitions of insolvency raise some issues, and we should make it clear that no one should be left out because of a technicality. We must ensure that we help the people who need assistance.

Andrew Miller: I congratulate my hon. Friend on his sterling work. In supporting new clause 34, does he agree that our party's history, which he mentioned, is one of protecting people who are disadvantaged by an outside body, in this case, pension funds, which is why schemes such as the HH Robertson scheme should be included?

Kevin Brennan: My hon. Friend makes the point eloquently—he has also made it in private meetings with Ministers—and I am sure that his comments have been heard.
	Other issues must be clarified. It is vital that the trade unions are involved in the consultations and the setting up and fashioning of the scheme. We must do everything that we can to maximise the value of the remaining assets in the pension schemes that have been wound up or are winding up. We must ensure that the three-year review, which is a key part of the measure, takes place, and the review must act if it finds that the scheme is inadequate and is not providing substantial help.
	I do not want to discuss exact percentages today, and the Government are right not to do so. We all know what 100 per cent. of nothing equals—the phrase is too impolite to say in this House—but that is what some workers faced. We must ensure that those affected, especially those who have contributed for many years and who are close to retirement, receive a substantial pension. We all have a duty to help those affected, and I pay tribute to all hon. Members, particularly to those on the Government Front Bench, for their contributions. Most of all, I pay tribute to the workers who have campaigned on the issue.
	The scheme is the right way forward. It was always going to be better for the Government to introduce their own proposals, which they have done. I welcome their proposals, and we should all support new clause 34.

John Redwood: I remind the House of my interests, including the fact that I am a pension trustee, but I am not speaking on behalf of that pension trust in this debate.
	Those hon. Members who, like me, were involved in past lives with the pensions industry, will know that final salary pension schemes are a great idea if they combine a generous employer with a well-funded scheme. Such schemes can offer extremely good pensions, but we also know that on too many occasions the employer either is not generous or is unable to be generous because of pressures or strains in the business. Despite the formidable array of regulatory controls, interventions and actuarial advice, on occasions the funds in schemes are woefully inadequate to cover future liabilities.
	In recent years in particular, when regulation has been intensified, Governments and their regulators have been wrong to give people the impression that final salary schemes are secure and that they are the best way to fund one's pension in all cases. Final salary schemes entirely depend on the generosity of the employer and how much the employer can afford to pay, and many people have been misled. It is ironic that the pensions crisis has developed severely in recent years while the regulatory effort and cost in the system have massively increased. One can waste an awful lot of money on regulation and not tackle the underlying problem, which is the inadequacy of pension payments and of the funds with which to pay them.

Andrew Selous: Does my right hon. Friend agree that there is an unsatisfactory inconsistency in the fact that whenever a member of the public may be about to buy equities there is a warning that the value of those equities could go up and down, whereas that is not the case with pensions? When the chief operating officer of the Financial Services Authority wrote to me in March, he said that he accepted that the risks of a scheme and employer insolvency are not dealt with in every publication about pensions. Does my right hon. Friend agree that people were misled in thinking that such schemes were guaranteed?

John Redwood: They were grossly misled. That is a great tragedy, as is the fact that many of their decisions were made as a result of that.

David Taylor: The right hon. Gentleman assented to his hon. Friend's comments on advice given to those about to invest in a pension scheme. Does he therefore assent to yet more regulation in a speech that is, one presumes, in favour of pruning it back?

John Redwood: I am not assenting to more regulation, but saying that it can be a waste of money and time if it does not address the underlying questions of whether enough money was going into the funds in the first place, whether that money was well managed in such a way as to combat the very real risks in financial markets, and whether there was the right relationship between the employee, the company and the trustees in each case. Clearly, that was not so—the regulators either did not know or did not care.
	It would not be possible to design a faultless system that guaranteed, through regulatory devices alone, that people could live in a world where final salary pension promises could be made and always met. We simply do not live in that sort of world. We have to explain honestly to people that there are limits to what one can offer and guarantee, and that there is a range of difficult choices in this field, as in many others, given that we lead our lives subject to risk. Just as one can buy the wrong house in the wrong area and the price can go down, so one can buy the wrong pension. It is unforgivable that regulators should have intervened in those judgments by giving bogus and wrong advice suggesting that a final salary guarantee is a real guarantee that can be met in all circumstances. Any sensible person would know that that is wrong. We have now lived through a series of circumstances in which many well-intentioned companies could not meet that guarantee, let alone those that may not have been so well intentioned and have also been hit by events in the markets.
	The purpose of the Government's new clause is wholly admirable. It is a cross-party wish—Members on both sides of the House have made these points powerfully and often—to see something done for the people who have fallen by the wayside because they had been given final salary promises that could not be met, and are going to be broken in a very material way. I am delighted that the Government are proposing to remedy that. However, as other Members have said, £20 million a year is a very small sum of money in relation to the magnitude of the crisis. My hon. Friend the Member for Havant (Mr. Willetts) pointed out that it equates to an average of £6,700 per person. It might buy an annuity of £500 a year for a person who does not want to index it, so he would have a progressively smaller pension in terms of purchasing power over the years, or £350 a year with increases in line with prices. That is roughly what current actuarial tables would show.

David Cameron: I wonder whether I might take my right hon. Friend back to the time when he was a councillor in Witney. He may remember the company Early's of Witney, the last blanket maker in the area, which sadly closed in 2002. Although it closed its occupational pension scheme, and pensioners are not getting paid, the ultimate parent company is still operating. Do not the Government need to clarify whether the parent company, in such situations, will be affected by new clause 34?

John Redwood: I am obviously disturbed to hear of the plight of my former constituents as a county councillor and my hon. Friend's constituents, who are well represented. I agree that when the Government work out the details of their scheme, they will need to give a precise view on such questions. As other hon. Members have asked whether it be fair to leave out certain categories of people because of technicalities relating to the timing of their employment and the nature of their fund compared with those of other people, given that they are all suffering from the same basic problem—a broken pensions promise.
	The rather small sum of money that each person would get from the purchase of an annuity under the Government's offer is probably not much above the amount that they would get from means-tested benefits, and may in some cases be below it. It would be interesting and useful if Ministers were to clarify the net cost of the scheme to give the House an idea of how generous it really is. It is possible that quite a lot of the £400 million that the Government are proffering, some of which comes from the taxpayer, will be covered by savings on means-tested benefits that would otherwise go to those poor people who had lost their main pension and were on the basic state retirement pension.
	We can all agree that more money will be needed. My hon. Friend the Member for Havant and the right hon. Member for Birkenhead (Mr. Field) have produced a good way, free to the taxpayer, of augmenting the amount that is available. I hope that Ministers will think about that. It might be a neat way out of their dilemma, as I am sure that they would join me in wishing to offer more support to the wide range of people who are suffering.
	I want to explore one other suggestion that, although it is widely canvassed in the House and thought to be part of the answer, might turn out to be another promise that is broken rather than observed—that is, the idea that the appointment of a scheme manager under the new clause could produce better management of the existing assets in these inadequate pension funds, which would somehow transform the position and pay larger pensions to people who have entitlements under those funds. Having been an investment director before I came into this House, I know how difficult it is to guarantee and deliver above-average performance, and how difficult it is to make wise asset choices that will just meet the requirements of a group of people who do not have enough money kept collectively on their behalf, but would like their money to go further to buy them a better pension.
	Under the new clause, the choice of the scheme manager would not be easy. Because the funds coming into the scheme are those of insolvent pension funds or pension funds in wind-up, they are very likely to be held almost entirely in the form of holdings in Government or gilt-edged securities—in other words, bonds that repay at a specific date in the future and pay a fixed rate of interest out of the consolidated fund of the country. They are as near to risk-free as one can get, short of putting one's money into a good bank and being able to withdraw it on any day one chooses at no capital loss. The actuarial advice would be that those funds have to be kept like that, given the circumstances.
	If the Secretary of State wants to achieve gains over and above those that can be obtained by the current scheme managers, two things will have to happen. First, he will have to ensure that there are regulations for his scheme manager that allow him to take much greater risks with the money on behalf of these people than any investment manager and actuary combination in the private sector would dare take, because they would feel obliged to opt for very low-risk strategies for this category of investor.
	Secondly, the scheme manager will have to be much better than most of the investment managers in the City of London, because he will have to get his strategy right to ensure that when markets go down, as they did in recent years, he is not invested in risky assets, and that when markets go up, if they do, he is fully invested in risky assets to try to recoup some of the money. I think that hon. Members immediately begin to see how difficult the situation is likely to be, and how unlikely. I suspect that the Secretary of State would not want the investment and risk rules that apply to his scheme manager to differ from those that apply to the professional scheme managers and investors who are out there at the moment.
	However, if the Secretary of State did overcome that hurdle and say to his hon. Friends on the Back Benches, "Yes, you're right—let's have a go and let our scheme manager take some extra risks", the scheme manager would invest in equities, not bonds, because that is the obvious thing to do. They would sell Government stocks and buy equities. If there were three good years in the equity market, everybody would be happy and start spending money; if there were three bad years—perhaps they would be allowed only one—we would be back in this House debating a compensation scheme for the compensation fund because it would have lost more money out of the limited resources that had come into the scheme manager's funds from the failed private sector pensions.
	Although it is welcome that the Government are producing a partial answer, we need to know the exact cost to the taxpayer. Clearly, it will not be as much as £400 million. I should like the Government to acknowledge that that sum is not nearly enough to deal with the problem. They should be generous in their definition so that it is fair to the different categories of people who have failed pensions. The Government should understand that there is no way of creating magic money out of existing assets in the failed pension funds. If there were, someone would already have done it.
	It is not easy and there is much moral hazard in taking money from other companies or taxpayers to sort out the problems, difficult though they are for the people who are locked into them. I am glad that the Government have begun to understand that they have some liability because the regulators must bear their fair share of the blame.

Derek Wyatt: I congratulate my right hon. Friend the Secretary of State, my hon. Friend the Minister for Pensions and their colleagues. If I am honest, after leading the campaign for 22 months with ASW Sheerness, I was not certain even last Thursday that we would get the provision. I appreciate that Ministers worked late on Wednesday and Thursday evenings.
	I have received different sets of e-mails. In one category, more than 100 say, "We didn't believe you'd ever do it", and in another, fewer ask, "Is that all?" It has been difficult for the Secretary of State because he knew the compelling arguments but could not say anything because of the moral hazard and could not give us any encouragement. I stress that we are undeniably thrilled even though more work remains to be done.
	I pay special tribute to ASW Sheerness workers who have led the campaign, especially Phil Healey, Keith Plowman and Andrew Parr. Andrew Parr set up a website with the rather inappropriate address of pensionstheft.org. It is probably the first internet campaign in British politics that has succeeded in changing a Government's mind. We have a database of thousands of people throughout the country and we have been able to provide a daily update of every meeting with every Minister, adviser or consultant. The campaign has been conducted live on the net and there have been hundreds and hundreds of comments, as there were last weekend after the statement on Friday. Again, I commend Andrew Parr who has done that on his own. It was a considerable effort and I hope that other campaigns will learn from it. It has been profoundly worth while.
	I thank the hon. Members for Havant (Mr. Willetts) and for Northavon (Mr. Webb) for their cross-party support. I hope that the Government and the Opposition understand how distressing it was when the Leader of the Opposition rose last Wednesday to claim some sort of control or authority over the issue when we had sought and got cross-party support. My hon. Friend the Member for East Carmarthen and Dinefwr (Adam Price) has also been very good and worked with us. Every hon. Member who had a case—120 Members have such cases—believed that there was a compelling morality about the matter. It is pleasing that the Government have accepted that. As a dear old friend said to me on the phone, "Isn't it great to be back in an old Labour Government?" There was a smile on my face when she said it.

David Taylor: My hon. Friend is all right at the moment—there are no Whips around.

Derek Wyatt: Well, they say that humour is in.
	I should like to tease out one or two issues. First, we are delighted that we have got the compensation. Even those who are upset that it is only £400 million acknowledge that it represents a scene shift. I will not mention Teutonic plates—[Hon. Members: "Teutonic?"] I meant tectonic plates. Such a scene shift is important.
	Secondly, hon. Members from all parties have questioned whether £400 million is enough. My hon. Friend the Member for Cardiff, West (Kevin Brennan) said that there were also assets. Let us assume that, on 30 June, the Minister will have more knowledge and a better understanding of all the schemes and can publish them and ascertain how many need help. If the £400 million means only £2 a day for 60,000 people—I appreciate that that is a crude calculation—and the addition of the assets means £5 a day, there would be genuine disappointment. We must try to resolve how else we can shift money into the fund.

Steve Webb: Does the hon. Gentleman accept that the calculations that Ros Altmann and others made take account of the assets and that all her estimates of the cost of compensation have been over and above the total figure? We must not get carried away into believing that the assets will ride to the rescue and that the £400 million therefore deals with the problem.

Derek Wyatt: I have worked with Ros in the past 22 months and some of her figures have come and gone a bit. I am happy to wait for the Government to publish their figures so that we can crawl all over them, but I take the hon. Gentleman's point.

Frank Field: Presumably, the Government will publish the figures soon. One worry is that we are not considering free assets because many of them have been turned into annuities. The annuities are appalling compared with people's expectations. There may not be huge amounts of assets, in the normal sense of the term, for pension funds.

Derek Wyatt: My right hon. Friend knows far more about occupational pensions than me. Twenty-two months ago, I could hardly spell the words "occupational pensions", let alone understand them.

Bill Tynan: That was in Teutonic times.

Derek Wyatt: Touché.
	It is serendipity, but I had Question 6 at Prime Minister's questions today. I would have congratulated the Prime Minister but asked him whether he would grant parliamentary time for a Bill on unclaimed assets if the £400 million was not enough. We will come back to that dilemma. I ask the Minister what we are going to do if the £400 million is not enough. A reasonable solution has not yet been found.
	Thirdly, when will the provision come into effect? The answer is important. When I visited a widow, Mrs. Wade, who lives in Murston near Sittingbourne, she burst into tears. It was terribly distressing. I visited a man, whose name I will not mention, in Halfway in Sheerness. He has not worked since the day he was made redundant and is now clinically depressed. After the statements on Friday, people are nervous about what they really mean.
	I hope that the Minister will take my remarks in the right way, but we do not have a fantastic track record on acting after saying that we will deliver something. The Child Support Agency is an example of that. When the Minister says that we will be accepting forms by 5 April 2005, I hope that the machinery will start and that he can reassure us that we have enough support staff to deal with 60,000 cases, which are complicated and require a lot of paperwork.

David Taylor: Does my hon. Friend share my reservations about such activities being put out to the private sector, which includes companies such as Capita? Does he share my hope that the arrangements, which are so necessary and will be so welcome, are kept in-house and not given to the Capitas of the world?

Derek Wyatt: Capita is a dirty word in my constituency where it runs housing benefit, which is approximately nine months behind. I simply stress that it is important to provide a robust system that will pay the money quickly. Again, I congratulate Front-Bench Members on their actions.

Adam Price: There has been much talk in the Chamber this afternoon of saints and heroes. The hon. Member for Sittingbourne and Sheppey (Mr. Wyatt) is a worthy candidate for canonisation for his sterling work on behalf of his constituents. Notwithstanding the earlier dramatic events, it is a good day for Parliament and politics. Politics works when Governments listen, however late in the day; there are legitimate criticisms on the record about that, but it is a good day for the reputation of politics. The Government have responded to what is widely acknowledged to be an important case of injustice, which has caused so much distress to so many people.

Andy Reed: I praise the hon. Gentleman's role in this campaign. Do not these events demonstrate exactly what is necessary in our democracy—namely that people should come and see their Members of Parliament? All of us who have supported this measure have reacted because people have come to us with their personal stories, which have had an impact on us. Back Benchers across the House have acted on that and worked with the Government. This is a great demonstration of how we can work together to improve the lives of our constituents.

Adam Price: I agree. I do not want to turn this debate into a mutual admiration society, but the hon. Gentleman makes an important point. Back Benchers, especially on the Government side, have played their role admirably. I think that we would all accept, however, that the real heroes are the workers at ASW and all the other companies involved, who have run one of the most effective lobbying campaigns in the past 20 years. They have changed Government policy not once but twice.
	The first change was on the principle of a pension protection fund, which the Government had considered three or four times in the last five years and rejected. That has been an important change of mind, and we welcome it. The second change has been on the specific issue of compensation for ASW and other companies. This has been a fantastic campaign, with its imaginative use of technology and its sheer determination. Who would not lose heart if they lost their job and their pension as well? Those workers have not lost heart, however. They have led this fight from the front, and they are heartily to be congratulated on what they have achieved.
	I also welcome the further announcements that have been made today. To be fair, the Government have set out a very clear timetable for how they are going to move this issue on. They have confirmed that there will be another opportunity for a vote in Parliament on these measures, on an affirmative resolution. Obviously, we have some doubts about the proposals, and this vote will give us a further opportunity to overturn the Government's majority if they do not come up with the goods, as is right and proper. They have also confirmed that there will be not only an initial review after three years but triennial reviews on an ongoing basis. That is valuable new information. I particularly warmly welcome the fact that the trade unions will be involved in devising the details of the scheme. That gives Members on both sides of the House a degree of comfort as we await the publication of the details.
	I believe that the Government had a responsibility in this matter. Reference has been made to the socialisation or nationalisation of risk, but I do not think that that is what has happened here. The Government were responsible because of the European directive that has been mentioned. I met officials of the Iron and Steel Trades Confederation in January last year, to point out to them that legal action had been attempted under that directive at the time of the Maxwell pensions scandal. The directive remained in force, but there had been no action by any Government on this matter—neither the previous Conservative Government nor this one. The directive was ratified in 1980 and member states had three years to transpose it into their own legislation. That never happened. The relevant article in the directive, which I urge Members to read, is very clear and concise in stating that the necessary measures should be put in place to safeguard supplementary company pensions. It could not be clearer.
	As we know, we are almost unique in the world in not having some kind of safety net for occupational pensions. The Government have now plugged that gap, but it should have been done 20 years ago. In that sense, I believe that the Government had a responsibility. If it turns out that what is on the table is not going to be adequate, the unions should leave open the option to continue their legal action, because the Government clearly had a responsibility in this regard.
	In the argument about whether there should be a cut-off point—a starting point, effectively—the Government have suggested that April 1997 should be the initial floor for applications. I do not think that that is acceptable, given what I have just said about the directive. Most people would accept that it was the case of Allied Steel and Wire that put this issue on the agenda initially, and I have checked the regulations of the ASW pension fund. The Government are arguing that April 1997 should be chosen because that is the date on which the new rules imposing a requirement on trustees to follow the priority order set down in the Pensions Act 1995 and removing discretion came into force. In the case of ASW, however, a priority order was already in place. The kind of priority order set out in the 1995 Act had already been in existence there for many decades. In that case, therefore, the Act was not relevant.
	The problem was the lack of a safety net or insurance system for occupational pension schemes. I know of cases going back to the early 1990s of people who have suffered in exactly this way, and the Government are on very shaky ground, morally as well as legally, in not providing the same level of assistance to employees in pension schemes of companies that became insolvent in 1994 or 1995. I know of one case of a botched privatisation under the previous Tory Government. Following the privatisation, the company became insolvent and the workers lost their pension assets. I also know that the Public and Commercial Services Union—a public sector union—is keen for its members to be afforded the same protection as proposed in the new clause. I therefore urge the Government to look closely at the issue of the starting point again. As I have said, their argument is not borne out by what was in the ASW regulations.
	Hon. Members have raised concerns about the amount of money in the fund. Indeed, the Leader of the House hinted in The Western Mail this morning at the possibility of a top-up if the money was found to be inadequate. He said:
	"If we find, in the process of addressing claims, that extra changes are needed, either on the resource or administration front, we will look at that."
	Will the Minister tell us whether the Leader of the House had been licensed to go outside Government policy, as he often is, or whether he was reflecting that policy? Are the Government prepared to top up the fund, from whatever source, if they find that it is inadequate? That is clearly what the ASW workers are looking for. They and all the other workers involved have had to endure terribly insecurity and distress through not knowing what their future position would be.
	The Government have set out the timetable and I urge them to come up with some hard data as soon as possible, so that we can provide the level of security that those workers deserve. I know that the Minister for Pensions referred in an interview on Radio Wales to workers being guaranteed "the greater part" of their lost entitlement. Now, I am not an expert on the English language—it is my second language and I did not have a classical education—but I think that "the greater part" would suggest more than 50 per cent. Bearing in mind the comments of the hon. Member for Cardiff, West (Kevin Brennan), I think that we would all expect far more than that. Can the Minister confirm that, at the very least, we shall not see anyone get less than 50 per cent., for goodness' sake?
	We in Plaid Cymru and the Scottish National party support the Liberal Democrat amendment. As a bare minimum, we should ensure that people get 90 per cent. of the pension that they were promised. There is a moral and legal case that they should get the whole amount that they expected. Certainly, now that the principle has been conceded, there is no reason why we should not provide the same level of compensation for those workers—who have changed Government policy twice—as we will do in future.

Sandra Osborne: I am aware that other Members wish to speak, so I shall keep my contribution short. I am absolutely delighted to support the new clause, which introduces yet another excellent measure by the Labour Government.
	There has been quite a lot of humour in today's debate, some of which has been uncharacteristic. In the previous debate, there was quite a lot of emotion. I spoke emotionally, and I make no apology for doing so. I may have laid it on a bit thick, however, as one of my colleagues said to me today, "Don't worry about today's debate, Sandra. All you need do is burst into tears and you'll get anything you want." That remark may have been slightly sexist, but perhaps I did lay it on a bit thick.
	Yet again, I want to highlight the case of the United Engineering Forgings workers. Before I do so, I want to pay tribute to their campaign, which they have carried out for almost three years. I first brought their case to the attention of the House in an Adjournment debate in Westminster Hall almost three years ago. Since that time, they have travelled the length and breadth of the country almost weekly, attending debates here, and holding marches, rallies and even an overnight vigil in Parliament square in the middle of winter—I thank Members who spoke to them at that time. They have picketed the headquarters of Prudential, met the chief executive, and taken part in television and radio interviews. Of course, they have had several meetings with Ministers, for which I am very grateful. Willie Riggins may not yet qualify as a national figure, but he is a familiar figure to my right hon. and hon. Friends, as they have seen him in so many places and at so many different times. It has been my pleasure, as well as my duty, to play a small part in that campaign.
	After a time, the UEF workers came together with other workers, including those of Allied Steel and Wire, who had lost their pensions. It is a textbook case of how collective action can work. From the rank and file to trade union leaders, to Back-Bench Labour and other MPs and Ministers, everyone could immediately see the injustice of the situation. The question was: what could be done about it? I know that the Government have taken some time to find out what could be done about it—it is a very complicated issue—but I am glad that they have done so. The only problem is that, at the moment, the Government amendment does not fully answer the questions as to exactly what will be done.
	UEF went into administration in June 2001, with a shortfall in its pension fund of £12 million. There were six UEF sites throughout the UK, and more than 1,000 workers. Some of the sites were sold off, but the Ayr site was taken over by a Swedish company, with no final salary scheme. The bottom line is that the UEF pension scheme is being wound up, and all will substantially lose their pensions. No matter what the circumstances are—whether a company goes into administration, receivership or insolvency—employees will either lose their pensions or not, and all cases should be dealt with equally on that basis.
	The Secretary of State has promised substantial help—those were his words—but we are all now left wondering what he means by "substantial". The pension protection fund will provide 90 per cent. compensation, and that will be clear to current pension fund members as soon as the Bill is passed. But those who have already lost out were led to believe that their pensions were 100 per cent. safe. Although I very much welcome the Government assistance, it is still incredible that that can happen without anyone accepting actual liability. Everyone who has been affected still cannot believe that that can happen and that there is nothing illegal about it.
	As has been stated many times, occupational pensions are part of the remuneration package agreed by employers and their employees. The majority shareholder of UEF was PPMV—an investment arm of Prudential. I eventually received an apology from the Prudential's group chief executive, Mr. Jonathan Bloomer, on the way in which the UEF situation was handled, while obviously not accepting liability.
	As stated earlier, we met Mr. Bloomer twice. He offered us tea and sympathy but refused to redress the shortfall in the pension fund. That was scant consolation to my constituents who have lost their pensions, especially as we read continually about the big fat bonuses—and packages if they leave their employment—that Mr. Bloomer and others of his ilk receive. Perhaps now, Mr. Bloomer and others will accept their responsibility in this area not only to the workers but to restore confidence in pensions. They have resisted previously, possibly on the grounds of liability, but making a contribution to this fund would not make them liable, and I call on them to do so.
	The UEF case is only too familiar to Members of the House, as I have outlined it previously, but I want an assurance from Ministers that the UEF workers will be accepted as part of the equation for the assistance being made available, and that both they and I will have the opportunity of input to the discussions that will take place shortly.
	I also want to take the opportunity to speak for those who are not members of trade unions because their company did not have a recognised trade union: for example, workers of the Dexion group. Many of those were at managerial level and worked in companies that have never recognised trade unions. I suspect that they very much regret that now. If there is one lesson from this, it is that every worker should join a trade union.
	One of the worries about the Government's amendment, because it is an enabling amendment, is that it tends to raise more questions than it answers. We urgently need those answers. I am happy that the Minister has outlined a set process that the Government will follow to bring forward those answers, with a time scale. I hope that the Secretary of State has not done inadvertently what he always said that he would not do—to raise false hopes among the workers. For those of us who have campaigned on this issue, last Friday's announcement was like manna from heaven. Of course it raised expectations—it was bound to do so—and it is perfectly reasonable that people want to know the scope of the assistance available. We all understand how complicated the situation is, but we cannot leave people in limbo with no indication of how it will work. I hope that the Minister's road map to resolve the situation is much more successful and has a quicker effect than the other road map about which we heard on a point of order earlier.
	The Secretary of State has said time and again that a pension promised should be a pension delivered. We have seen a great step forward today in delivering that promise in a situation of great injustice. I very much welcome that, and I congratulate the Secretary of State on it. I said in the previous debate that if anyone could do something about this matter, it was the Secretary of State, and I thank him very much.

Sue Doughty: I want to keep my remarks short. First, I apologise for not having taken part in these debates previously, because I did not have a constituency need. More recently, however, we have had a major problem.
	Hon. Members will be familiar with Dennis buses, which we used to see on the roads as a key part of the London transport strategy, and which are now marketed as part of TransBus. That company collapsed, as part of the Mayflower collapse, in April this year. Even now, many of my constituents in the Dennis Group pension and assurance scheme still do not know the extent of the damage done to their pension. Loyal employees who enabled the company to do great things were forced, as part of their conditions of employment, to join a scheme that has now collapsed around them through no action of theirs.
	I received a letter from a woman constituent—as all Members know, women have had a difficult time with pensions over the years—who had to plead to join a scheme for which, as a part-time worker, she had initially been ineligible. Having joined it, she had to find a lump sum with which to buy the years of pension that were missing. Now she has been left high and dry. Another tragic case involves someone with years of service who joined a share save scheme and was also with Equitable Life. It is just not fair.
	I am grateful to the Government for listening to Members' concerns and taking them on board, but I am still worried about the size of the fund. I shall not repeat all that has been said today, notably by my hon. Friend the Member for Northavon (Mr. Webb), but I am concerned about the Dennis Group pension assurance scheme. There are 130 contributing members, 305 deferred members and 150 pensioners. The trustee has calculated that the buy-out cost for just that number would be £24 million. The same trustee is handling another fund whose buy-out cost would be £80 million. All these sums will add up.
	I look forward to the work that the Government are doing to put flesh on the bones of their proposals, and make this a scheme that will bring about justice. Employees such as my constituents who have given a lifetime's service to their company and made it a great business do not deserve to be treated like this.
	I wrote to the Minister, who replied just before last week's announcement by the Government. I was initially depressed, because he wrote a very cautious letter about meeting people, and I thought that it was a Government cop-out. At the end, he wrote:
	"It would be very cruel to raise expectations for these people who have suffered such a dramatic blow to their security in retirement if the Government cannot then provide assistance."
	What I want is for the Government to provide full assistance, and to make this into a full fund so that we can give real help to people who have given a lifetime of service. I think particularly of the women who had to fight so hard for a decent pension scheme, only to see it fall away from them.

Andrew Miller: I want to put my speech in context—the context of the fantastic work being done by a Labour Government.
	In 1995, the right hon. Member for Hitchin and Harpenden (Mr. Lilley) said:
	"We believe that a levy on schemes is more appropriate since the benefits of well-regulated schemes accrue only to members and employers. Many taxpayers are not members of schemes, so why should they pay?"—[Official Report, 24 April 1995; Vol. 258, c. 527.]
	The Tories were fundamentally opposed to allowing the public to pick up the liabilities from schemes.
	Last week, during Prime Minister's Question Time, the Leader of the Opposition said:
	"this Government have introduced legislation—to deal with a problem that has arisen under this Government."—[Official Report, 12 May 2004; Vol. 421, c. 352.]
	That is entirely wrong, as we know from today's debate. I am on record as congratulating the hon. Member for Solihull (Mr. Taylor), who started the serious fraud investigation into the HH Robertson case. My right hon. Friend the Member for Birkenhead (Mr. Field) mentioned a case in Burnley. Early-day motion 308 in 1992 proves that the Leader of the Opposition was being opportunistic. That is a polite way of putting it; it may have been worse.
	I have had a close interest in the HH Robertson case for a long time. There are now more than 1,000 entries for it in Hansard. I thought at one point that my hon. Friend the Minister of State was airbrushing it from history. I hope that he will not do so, for reasons that I shall try to explain. The alleged "white knight" who took over the company and then asset-stripped it left the pension fund £5 million short. After a two-year fraud squad investigation, the Serious Fraud Office could not bring criminal proceedings because—as we all know—intent is so hard to prove in such cases. In the meantime, the occupational pension fund became insolvent.
	Soon after the change of Government, successive pensions Ministers—and other Ministers—engaged in constructive dealings on the case, as did the hon. Member for Solihull, but we were all stuck with the law as it stood at the time. In 1998 the hon. Member for Pontypridd (Dr. Howells), then Under-Secretary of State for Competition and Consumer Affairs, wrote to me:
	"That organisation"
	—the Occupational Pensions Regulatory Authority—
	"has however been unable to deal with the issues at HH Robertson simply because of the timing and I do not see grounds for a further consideration of the law at the moment."
	Similarly, the then Minister of State for Social Security, the right hon. Member for Southampton, Itchen (Mr. Denham), wrote:
	"I am aware that this response is not what you would like to hear. I must reiterate, however, that the Government is not the guarantor of private pension funds and does not see its role as one of intervening in the debt arrangements of private companies."
	That position was accepted by successive Governments because we, as a House, had failed in our responsibility when passing the Pensions Act 1995. We thought that we were creating an environment in which pension schemes would be safer for our constituents in future. It is on the basis of our failure that we should now look again at the Royal Assent that the Act received.

Nigel Waterson: The hon. Gentleman rightly mentions the 1995 Act, which established a minimum funding requirement. For the sake of completeness, however, he ought to remind the House that this Government have twice diluted the MFR since taking office.

Andrew Miller: If the hon. Gentleman accepts with me that we failed in the 1995 Act, I may accept one or two things from him.
	The HH Robertson scheme was wound up in the spring of 1997, before what is perceived as the magic date of 6 April. There were suspicions that it was being brought forward to avoid the consequences of the 6th, and I can produce evidence for that.
	I hope that Ministers will note what has been said today, and will not have a fixed date in their minds. The date needs to be flexible so that the results of evidence and research can be taken into account. I hope that my hon. Friend the Minister of State will bear it in mind that the breadth and depth of the scheme, how far it goes back, whom it covers, and the level of compensation remain matters for negotiation and discussion with all the stakeholders.

Nigel Dodds: My concern arises from the plight of my constituents who worked at the IFI factory in north Belfast, formerly Richardson's, and that of workers at TKECC in the constituency of my hon. Friend the Member for Strangford (Mrs. Robinson), who has led a doughty battle on their behalf. Those workers were devastated to find that their hard-won pension savings, building up a nest for their retirement, had been snatched away from them through no fault of their own.
	I welcome the fact that new clause 34 has been introduced today by the Government. An important step has been taken, and I pay tribute to all who have played a major role in bringing this day about, including the hon. Members for Cardiff, West (Kevin Brennan) and for Sittingbourne and Sheppey (Mr. Wyatt), and others. I raised the matter in relation to my constituents in the Northern Ireland Grand Committee on 29 April, but I will not follow the example of some others and therefore claim credit for the Government's announcement today.
	I welcome the fact that the announcement has been made. The majority of the 200-plus employees at Richardson's IFI in Belfast gave 20 or even 30 years of service, and a significant number gave even more. However, within five years of reaching their retirement, they were told that they had no jobs and, worse still, that their pensions were being put in serious jeopardy. There were similar considerations in the case of the TKECC plant.
	The hon. Member for Ayr (Sandra Osborne) mentioned the emotions that were evident on Second Reading. I was present during that debate although, unfortunately, I was not called to speak, and I think that emotional is the right description of it. We are dealing with people, many of whom have worked all their lives, who are genuinely devastated and destroyed, with their families, by the terrible plight that they are in. If emotions were not raw, and Members were not standing to express and display those emotions on their constituents' behalf, we would be failing in our duty to them.
	As the hon. Member for East Carmarthen and Dinefwr (Adam Price) said, politics has worked. Parliament and the Government have been shown to have responded on this issue. That is absolutely right, although there are questions over the extent of the compensation or assistance. There are serious questions to be asked in that regard. I join other hon. Members in urging the Government to go as far as they possibly can in giving full compensation to this group of workers. It is absolutely wrong to have one set of policies—one set of assistance or compensation criteria—for one set of workers, and a different set for the workers whom we are considering today. The sum that has been talked about, £400 million over 20 years, does not in my view come anywhere near to meeting the need. One of my constituents faxed me today to say that he reckoned that the figure was out by three times in value and two and a half times in length. He, too, has been working on the back of an envelope today.
	There is serious work to be done on the detail, but this is a major step in the right direction in terms of the principle that has been adopted. I urge the Government to take on board the amendment tabled by the hon. Member for Northavon (Mr. Webb) on companies that are solvent and have wound up pension funds. That applies to the company, TKECC, that I mentioned. It is absolutely wrong that workers in those companies, through not fault of their own, should not receive compensation or assistance when others do. I believe that they would not understand in any way why they should be excluded.
	I welcome the fact that the legislation, and the figures and amounts, will be reviewed every three years. That is extremely important, and will allow us to consider the matter in due course. Yesterday, when debating another part of the Bill, we discussed the fact that it does not, on the face of it, apply to Northern Ireland immediately. The Minister gave an undertaking that an Order in Council would be brought forward to ensure that the Bill would apply to Northern Ireland at the same time as it applies to the rest of the country. I welcome that. There should be no question of citizens in Northern Ireland receiving any less compensation than others elsewhere in the kingdom, and they should receive it at the same time.

Adrian Bailey: I shall keep my remarks brief. I have suffered the experience, which I know many hon. Members have had, of receiving representations from honest, hard-working constituents who have been part of companies that, for various reasons, have not been able to meet their pensions obligations. Sigmacast, formerly known as Triplex, in my constituency—a long-standing foundry—was subjected to a management buy-out last September. The pensions fund was found to be £18 million short, and the successor company was not prepared to sponsor a successor pension fund. The result is that some 150 workers, who would have enjoyed deferred benefits, have been told that they will get nothing at all.
	The news of the Government new clause, presented last week, was wonderful news for those workers. I share that feeling of joy, but I also feel a certain circumspection and concern. We do not know how much there will be and we do not know whether that particular case will fit with Government guidelines. I do not expect the Minister to make a determination on this particular case at this moment in the debate, but I should like reassurance that the representations of the unions, the employees and the members will be taken into full consideration and that we will have a sympathetic response. I do not need to tell the Minister that the worst possible outcome is to raise people's expectations and then to dash them. We would expect the Government response to be consistent with the declared objectives of the proposal.
	I have couple of quick, general points. First, in their consideration of funding, I hope that the Government will take into account the fact that if we do not provide adequate pension compensation—no, I shall not use the word "compensation", but say "assistance" instead—for those 60,000 who have lost their pensions, there will be a double financial whammy. On the one hand, the tax receipts that would have come from those pensions will be lost, and on the other, there will be potential benefit obligations in cases of hardship.
	Secondly, I welcome the Government's commitment to working with other stakeholders to add to the fund. Regardless of the implementation of the pension protection fund, there is a potential loss to the pensions and savings industry and to the Exchequer from people who will have seen or heard the publicity about those 60,000 families and therefore decided not to invest in company pensions—irrespective of promises made, or of the implications of the pension protection fund. It is therefore essential that the Government, the pensions and savings industry and companies all work together to ensure that the fund is added to, so that there is an adequate level of assistance for those who have lost their pensions in the past.

Several hon. Members: rose—

Madam Deputy Speaker: I call Mr. Wicks.

Bill Tynan: On a point of order, Madam Deputy Speaker. I understand that we are on Report, and that the situation is that if a speaker is on their feet, they are entitled to be called during the debate.

Madam Deputy Speaker: I am afraid that that is incorrect. I am sorry to have to disappoint the hon. Gentleman. Mr. Malcolm Wicks.

Malcolm Wicks: We have had a good debate, and no doubt we can return to some of its themes on Third Reading. Obviously, not everyone has been able to make their contribution and I know that many would have liked to do so. For example, I see my hon. Friend the Member for Birmingham, Northfield (Richard Burden), who brought a delegation of Kalamazoo workers to see me, which very much informed our speeches. We have just had a useful contribution from my hon. Friend the Member for West Bromwich, West (Mr. Bailey). I do not think that I can even refer to every speaker in the time available, and certainly not to every point raised, although the debate has been good on both sides.
	The shadow Secretary of State for Work and Pensions, who I know cannot be here now—he sent me a note to that effect—rather reminded me, given some of the debate, of the old adage that failure is an orphan but success has many parents. I should not want to prejudge the PhD thesis that will one day be written about this era of policy development, with or without the official papers, but as long as the PhD student is not being supervised at Bath university by a well-known professor, I shall look forward in my own old age—when I am receiving the £100-plus winter fuel allowance—to reading that thesis. However, the idea that the parent of this provision could possibly be the Leader of the Opposition is an extraordinary one. If anyone dare advance that claim to parentage, I will demand a DNA test immediately.
	I should emphasise that right from the start of this process we have adopted the difficult but honest position of saying that we could offer no false hope; indeed, my right hon. Friend the Secretary of State has been straight with people all along. This is not a U-turn, as some have said. We have had to be cautious from the start. We have had to look at the evidence and to listen to ideas, and I am delighted to be able to introduce this assistance package. Purely for accuracy's sake, I should point out that if anyone can claim credit for this package, above the many other voices that we have heard, it is the Secretary of State. From the start, he has been absolutely determined—albeit cautiously, so that we do not raise false hopes—that we should do something if at all possible, and I pay tribute to him today.
	The shadow Secretary of State asked various questions. Some of them concerned the detail, which we cannot provide at this stage. We will have discussions with stakeholders, including the trade unions, and it is important that we do so. We have talked about the scale of assistance constituting a significant or substantial proportion of pension rights, and we cannot go further at this time.
	Although the shadow Secretary of State did raise some serious issues, his introduction drew rather more on the tittle-tattle of the Sunday newspapers than this important occasion deserved. He moved somewhat off course when he referred to alleged comments by me on the pension protection fund and pension rights. Those who read our proceedings in Committee will discover that we made it absolutely clear what those rights are. We had to introduce qualifications into the Bill, because in extremis one has to make provisions. There is a serious possibility that the shadow Secretary of State summarised my approach to this issue in a manner that was not very useful.
	It was unfortunate that the shadow Secretary of State made somewhat patronising remarks about ASW workers celebrating the announcement of this assistance scheme. I, too, saw those scenes on television, which were touching and moving. At long last, their campaign, alongside that of others, has brought the results that our Department has doggedly worked towards.

Anne Begg: Workers in my constituency who lost out because of the collapse of the Richards pension fund were also pictured celebrating, on the front page of my local evening newspaper. This is a major breakthrough and the Government deserve to be congratulated on it.

Malcolm Wicks: Indeed.

Dennis Turner: Will my hon. Friend give way?

Malcolm Wicks: Yes, but it might be the last time.

Dennis Turner: I should like to add the congratulations of workers at GKN Thompson Chassis, in Bilston, which is in the black country. They welcome this measure as we welcome the flowers in May, and they thank the Secretary of State for his intervention and for the initiative he has taken.

Malcolm Wicks: I always welcome good news from Wolverhampton. We need to look at the detail and we shall of course do so, but such workers were celebrating an important advance, excellent parliamentary representation on their behalf, and a Labour Government—be it old or new—who are delivering.
	My right hon. Friend the Member for Birkenhead (Mr. Field) started off by praising Ministers. I always reach for my flak jacket when he does that, because with all due respect, I see what is coming. However, he asked some important questions, and rightly so, about which people might be covered by the provision, and about the time scale and dates. We have listened very carefully to his comments, which are based on experience, as well as to those of other colleagues. He will note that the new clause is a deliberately broad enabling provision that that omits any mention of particular dates. We will want to draw on clear principles of fairness when looking at the practicalities. I have explained the process through which our proposals are drawn up, and I repeat that we shall consult my right hon. Friend and others about these important details.

Frank Field: What the Minister has just said could affect all the amendments to the new clause. The labour resource centre received a Government briefing that gave specific dates on which the provision would and would not apply. Was that briefing merely by way of illustration, or did it reflect the Government's view?

Malcolm Wicks: It indicated our thinking on this issue. I said what I just said very deliberately, and as I have also pointed out, the provision will need to bear some relation to the Pensions Act 1995. I hope that that has reassured my right hon. Friend, and that he will consider withdrawing his amendments.
	At one stage, the hon. Member for Northavon (Mr. Webb) almost seemed to suggest that this assistance constitutes charity or sympathy. There is nothing wrong with sympathy, but it butters no scones: it needs to be followed by action, and it is being followed. Alongside considerable existing scheme assets and any money that we can hopefully draw in from industry, this proper assistance scheme will provide a significant proportion of pension rights to individuals in future.
	My hon. Friend the Member for Cardiff, West asked a technical but very important question about definitions of insolvency. We expect that insolvency will be defined as it is intended to be defined in the pension protection fund. This definition will include schemes that are sponsored by employers in administration and in receivership, as well as those in liquidation. We need to consider in detail the implications of the definition that we intend to use, but we are not about using technicalities or legalese to define people out of a proper assistance programme.
	I was in danger earlier of awarding too many honours in my descriptions of certain hon. Members, but I am serious when I say that my hon. Friend the Member for Sittingbourne and Sheppey (Mr. Wyatt) has been a persistent, almost obstinate champion of the workers to whom he is so committed. I pay tribute to him in that regard. One photo opportunity that he helped to organise involved a group of ASW workers stripping off on the beach—mercifully, behind a banner. There is no truth in the rumour that one reason why we hastily found £400 million was to prevent my hon. Friend from taking off his clothes—be it on the beach or elsewhere.
	There is a great deal of unity in the House, which has welcomed the assistance package, so I hope that those who have tabled the various amendments will consider withdrawing them. This was an injustice that needed to be righted and an unfairness that we needed to overthrow, and that is the purpose of this assistance package. Yes, we need to work on the detail, and I have explained our strategy and the milestones that we have adopted. A scheme will be in place by the spring of next year, and as soon as is practicable afterwards, it will deliver the pensions that belong to the workers, and which should be given to them.

Steve Webb: On a point of order, Madam Deputy Speaker. Would you clarify what would happen if the right hon. Member for Birkenhead (Mr. Field) did not pursue his amendment (d)? Could the House still divide on amendments (b) and (c), which have attracted support throughout the House?

Madam Deputy Speaker: I am certainly mindful to accept a vote on amendment (c) but not necessarily on amendment (b).

Frank Field: The Minister can put his flak jacket away for the moment. It is quite clear that the Bill will go to the other place. Hon. Members who have tabled amendments are anxious that they are fully dealt with. I shall therefore not press my amendment.
	It being Five o'clock, Madam Deputy Speaker proceeded pursuant to Order [18 May] to put forthwith the Questions necessary for the disposal of business to be concluded at that hour.
	Clause read a Second time.
	Amendment proposed to the proposed new clause: (c), in line 73, at end add–
	'( ) Assistance from the financial assistance scheme shall be at least sufficient to provide total benefits to qualifying members as they would have received had their scheme fallen within the scope of the Pension Protection Fund.'.—[Mr. Webb.]

Question put, That the amendment be made:—
	The House divided: Ayes 203, Noes 339.

Question accordingly negatived.
	Clause added to the Bill.

Clause 265
	 — 
	Modification of this act in relation to hybrid or multi-employer schemes

Amendments made: No. 216, in page 192, line 2, leave out second 'and'.
	No. 217, in page 192, line 3, at end insert ', and
	(   )   section [Financial assistance scheme for members of certain pension schemes] (financial assistance scheme for members of certain pension schemes).'.—[Malcolm Wicks.]

Clause 273
	 — 
	Parliamentary control of subordinate legislation

Amendment made: No. 218, in page 196, line 21, at end insert—
	'(   )   regulations under section [Financial assistance scheme for members of certain pension schemes] (financial assistance scheme for members of certain pension schemes);'.—[Malcolm Wicks.]

New Clause 20
	 — 
	Reviewable ill health pensions

'(1)   This section applies where there is an assessment period in relation to an eligible scheme.
	(2)   The Board may review a reviewable ill health pension in respect of a member under the scheme if—
	(a)   disregarding section [Effect of a review], the member would be entitled to compensation under paragraph 3 of Schedule 7 in respect of the pension if the Board assumed responsibility for the scheme,
	(b)   the member did not attain normal pension age in respect of the pension before the assessment date, and
	(c)   the pension is attributable to the member's pensionable service under the scheme or another scheme.
	(3)   An ill health pension in respect of a member under the scheme is reviewable for the purposes of subsection (2) if the member is entitled to the pension by reason of an award under the scheme ("the award") which was made—
	(a)   in the period of three years ending immediately before the assessment date, or
	(b)   before the end of the prescribed period beginning with the assessment date, in response to an application made before that date.
	(4)   Where—
	(a)   before the assessment date, an application was made under the scheme for the award of a pension before normal pension age by virtue of any provision of the scheme rules making special provision as to early payment of pension on grounds of ill health, and
	(b)   the trustees or managers of the scheme failed to decide the application before the end of the period mentioned in subsection (3)(b),
	section 10 of the Pensions Act 1995 (c.26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure that the application was decided before the end of that period.
	(5)   Where—
	(a)   the award was made in response to an application which—
	(i)   was made on or after the assessment date, or
	(ii)   was made before that date but not decided by the trustees or managers of the scheme before the end of the period mentioned in subsection (3)(b), and
	(b)   in the absence of this subsection, the award would take effect before the assessment date,
	the award is, for the purposes of determining the compensation payable under this Chapter in a case where the Board assumes responsibility for the scheme, to be treated as taking effect after the date on which the decision to make the award was made.
	(6)   Regulations must prescribe the procedure to be followed in relation to the review of a pension under this section and any subsequent decision under section [Effect of a review].'.—[Mr. Pond.]
	Brought up, and read the First time.

Chris Pond: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss the following:
	Government new clause 21—Effect of a review.
	Government new clause 22—Interpretation of sections [Reviewable ill health pensions] and [Effect of a review].
	Government amendments Nos. 99, 104, 105, 111 and 145.

Chris Pond: Given the spirit of celebration evident in our proceedings this afternoon, I hope that there is considerable agreement about how to move forward and improve the Bill. In Standing Committee, an Opposition amendment was tabled with the aim of giving the pension protection fund board the power to review any early retirements that took place in the three years prior to the assessment date, and to make retrospective adjustments where it appears that the award created an unfair advantage to certain scheme members.
	We agreed to consider the essence of that amendment. These amendments introduce new clauses to review the awards of early retirement by scheme trustees or managers on the grounds of ill health.
	We have specifically focused on scheme members who have retired early on the grounds of ill health, because that is the only way in which scheme members under NPA can receive the 100 per cent. level of compensation and be exempt from the compensation cap on entry to the PPF. Scheme members who have taken early retirement other than on the grounds of ill health will be subject to the 90 per cent. level of compensation and the compensation cap, so they are unlikely to be able to create an unfair advantage.
	The clauses allow for the board to review certain cases of early retirement on the grounds of ill health where the award was made in the three years prior to the assessment date, or in limited circumstances where the application had been made before the assessment date. Other conditions for review must also be satisfied—for example, the member must be under normal pension age immediately before the assessment date.
	The board will consider whether the original decision by the trustees or managers regarding the ill health award was based on a mistake or was made in ignorance of a relevant fact. The board will also consider whether the member should have been entitled to an ill-health award at any stage before the assessment date.
	The new clause is an important addition to our moral hazard powers. It will work in conjunction with the requirement that some rule changes that were made should be disregarded in certain circumstances. Together, they will be a significant deterrent to individuals looking to take advantage of the PPF.
	Amendments Nos. 99, 105 and 111 are technical amendments relating to the new clauses. Amendment No. 104 will amend clause 127, on the board's obligation to obtain valuation of assets and protected liabilities, to require prescribed information to be included in the written valuation. That may include details of some of the basis of the valuation. Amendment No. 145 will insert a new paragraph into schedule 7.
	The admissible rules are the scheme rules, excluding certain recent rule changes that were made, or took effect, in the three years prior to the assessment date. If the combined effect of the recent rule changes and recent discretionary increases result in an increase to the cost of the protected liabilities at the assessment date, those changes are to be disregarded. Entitlement to compensation is based on admissible rules rather than scheme rules. That is an integral part of the moral hazard provisions, to ensure that pension schemes do not increase their liabilities in the knowledge that the PPF will be required to meet those liabilities.
	If an individual has been receiving a pension and the scheme rules under which the pension was awarded are disregarded for PPF purposes, in some cases we will want to ensure that he or she can still receive payments of compensation from the assessment date. We also want to ensure that any compensation to which the individual becomes entitled will take account of scheme benefits that the individual may have already received. Regulations will set out how such a person's compensation is to be determined. The effect of the amendment will be to prevent scheme members from being inadvertently affected by the PPF admissible rules and from losing their PPF compensation or gaining unintended enhanced compensation.

Nigel Waterson: This is another anti-avoidance measure, and the Minister was kind enough to nod in the direction of the provenance of this new clause, which was one of the amendments we tabled in Committee. Ill health is a way of getting round the 90 per cent. rule and the cap. The issue was originally raised at the behest of the National Association of Pension Funds, which suggested the amendment to allow a review of early retirements.
	Our amendment did not specifically mention ill health, but it is likely to be the most obvious course to achieve what is called inappropriate early retirement, unless the Minister can think of any other ways around the requirements in the Bill. The three-year rule is not without some sense. Practical difficulties will arise in the enforcement of such moral hazard powers, as the explanatory note calls them. That term may stretch matters a little far: we are talking about anti-avoidance measures to stop people taking advantage of the scheme. Indeed, in Committee, the Minister referred to the episode involving a famous individual who apparently acquired Alzheimer's disease and then made a full recovery. I am sure that there have been other, less well-publicised instances of people suffering ill health and then—thanks to the wonders of medical science—making a full recovery after they have put together a satisfactory retirement package. That would be an obvious way out of the requirements of the PPF and that concerns the NAPF, which is why we tabled the original amendment. There should be a power to investigate such matters.
	The new clause would give the board the power to revoke the award of a full pension on grounds of ill health. Perhaps the Minister could be a little more precise about how that would happen. The pension could be revoked some two or three years after the event, for example. Does the Minister envisage the board demanding a medical examination? What powers would the board have to require a medical examination if the person did not consent? What attention should be paid to any changes in medical condition in the intervening period? Those are practical issues, but the principle is right: we should not allow an obvious way around the PPF regulations and ill-intentioned people could use ill health to do so.

David Drew: Ministers and Opposition spokesmen are trying to address an issue that we come across in our constituencies. Occasionally, people are encouraged to leave on grounds of ill health, but if that attempt fails they may be granted early retirement. That does enormous damage to pension schemes, and anything that can be done to tighten up procedures is welcome. However, does the hon. Gentleman agree that difficulties arise when people's situations are judged retrospectively? I do not know how we can reflect that in the law, because it comes down to the morality of the case. I am not sure about the term "moral hazard", but the problem needs to be addressed.

Nigel Waterson: That is a fair point. The decision to make the full award of a pension on grounds of ill health is taken at a certain moment in time, and the new clause would provide that that decision could be re-examined some years later. As I understand it, the board will try to put itself in the position of the scheme at the time that the decision was made, not at any other point in history. The obvious example is stress, the 21st century disease. In many cases, the effects of stress are very real, but it can also cover many other situations. Of course, it would be perfectly easy to argue that a high-flying executive had to retire due to ill health caused by stress, but that when the reasons for the stress were removed—whether the pressures of the job or worries about the pension—it would not be surprising that they made a reasonably good recovery.
	Although we have no problem with the intentions behind the new clause, some real practical issues are involved and it would be helpful if the Minister could consider them in any further comments he makes. However, we broadly support the new clause.

Chris Pond: The hon. Gentleman and my hon. Friend the Member for Stroud (Mr. Drew) are right to raise the practical issues. We are all agreed on the principle. We need to make sure that the board acts fairly when making assessments. There will be people—described by the hon. Member for Eastbourne (Mr. Waterson) as "ill-intentioned" individuals—who may try to abuse the system, but many more will have had to retire early on ill-health grounds and we want to protect their position.
	We shall introduce regulations that set out precisely the procedure that can be used. I do not want to anticipate the regulations in too much detail, but there could be circumstances where medical evidence will form part of the evidence needed by the board to make its judgment. The board will need to ensure that all relevant evidence is taken into account and that an award is not made on an incorrect basis, especially because in almost all cases such decisions will be made after the event, as my hon. Friend the Member for Stroud said. We need to ensure that judgments are made fairly and that people have confidence in the way that they are made.
	Question put and agreed to.
	Clause read a Second time, and added to the Bill.

New Clause 21
	 — 
	Effect of a Review

'(1)   This section applies where, during an assessment period in relation to an eligible scheme, the Board reviews an ill health pension under the scheme by virtue of section [Reviewable ill health pensions].
	(2)   Where the conditions of subsection (3) are satisfied, the Board may determine that the compensation payable in respect of the pension, in a case where the Board assumes responsibility for the scheme, is to be determined in the prescribed manner on and after the relevant date.
	(3)   The conditions are—
	(a)   that the annual rate of compensation which would be payable under this Part in respect of the pension at the assessment date, if the Board assumed responsibility for the scheme, exceeds the notional reviewed rate of compensation in respect of the pension,
	(b)   that the Board is satisfied—
	(i)   that the decision to make the award was made in ignorance of, or was based upon a mistake as to, a material fact relevant to the decision,
	(ii)   that, at the time that decision was made, the member knew or could reasonably have been expected to know of that fact and that it was relevant to the decision, and
	(iii)   that, had the trustees or managers known about, or not been mistaken as to, that fact, they could not reasonably have decided to make the award, and
	(c)   that the Board is not satisfied that the criteria in the admissible rules governing entitlement to early payment of pension on grounds of ill health were satisfied in respect of the member at any time after that decision but before the assessment date.
	(4)   For the purposes of subsection (2) "the relevant date" means the date during the assessment period on which a scheme valuation in relation to the scheme becomes binding.
	(5)   The power to make a decision in respect of the pension under subsection (2) may only be exercised at a time which falls—
	(a)   during the assessment period but before the time the Board first approves a scheme valuation under section 128 in relation to the scheme, and
	(b)   within a reasonable period beginning with the assessment date or, where the decision to make the award was made at a later date, that date.
	(6)   Regulations made for the purposes of subsection (2) may, in particular, include provision applying any provision of Schedule 7 with such modifications as may be prescribed.'.—[Mr. Pond.]
	Brought up, read the First and Second time, and added to the Bill.

New Clause 22
	 — 
	Interpretation of Sections [Reviewable Ill Health Pensions] and [Effect of a Review]

'(1)   For the purposes of sections [Reviewable ill health pensions] and [Effect of a review]—
	"admissible rules" is to be construed in accordance with Schedule 7;
	"assessment date" means the date on which the assessment period begins;
	"ill health pension", in relation to a scheme, means a pension which, immediately before the assessment date, is a pension to which a person is entitled under the admissible rules in circumstances where that entitlement arose before normal pension age by virtue of any provision of the admissible rules making special provision as to early payment of pension on grounds of ill health;
	"normal pension age", in relation to a scheme and any pension under it, means the age specified in the admissible rules as the earliest age at which the pension becomes payable without actuarial adjustment (disregarding any admissible rule making special provision as to early payment on the grounds of ill health) and sub-paragraphs (2) and (3) of paragraph 30 of Schedule 7 apply in relation to this section as they apply in relation to that Schedule;
	"notional reviewed rate of compensation", in respect of an ill health pension, means—
	(a)   the annual rate of compensation which would be payable in respect of the pension at the assessment date, if the Board assumed responsibility for the scheme and the compensation so payable at that date was determined in accordance with regulations under section [Effect of a review](2), or
	(b)   if no such compensation would have been so payable at that date, nil;
	"scheme rules" is to be construed in accordance with Schedule 7;
	"scheme valuation", in relation to a scheme, means a valuation under section 127 of the assets and protected liabilities of the scheme as at the time immediately before the assessment period begins.
	(2)   For the purposes of section [Reviewable ill health pensions](4)—
	(a)   the definition of "normal pension age" in subsection (1), and
	(b)   sub-paragraphs (2) and (3) of paragraph 30 of Schedule 7 as they apply by virtue of that definition,
	have effect as if the references in those provisions to the admissible rules were references to the scheme rules.
	(3)   Paragraph 33(4) of Schedule 7 (references to "ill health" to be construed in accordance with regulations) applies in relation to sections [Reviewable ill health pensions] and [Effect of a review] and this section as if, in that provision, the reference to that Schedule included a reference to those sections and this section.
	(4)   In those sections references to the Board assuming responsibility for the scheme are to the Board assuming responsibility for the scheme in accordance with this Chapter at the time the assessment period in question comes to an end.'.—[Mr. Pond.]
	Brought up, read the First and Second time, and added to the Bill.

New Clause 23
	 — 
	Referral of Questions of Law

'The PPF Ombudsman may refer any question of law arising for determination in connection with—
	(a)   a reviewable matter referred to him by virtue of regulations under section 196, or
	(b)   a matter referred to him by virtue of regulations under section 197,
	to, in England and Wales, the High Court or, in Scotland, the Court of Session.'.—[Mr. Pond.]
	Brought up, and read the First time.

Chris Pond: I beg to move, That the clause be read a Second time.
	The new clause builds on an Opposition amendment tabled in Committee and accepted in principle at that time. I am extremely disappointed that the hon. Member for Tatton (Mr. Osborne) is not with us for this part of our proceedings, as in time the provision may come to be known as the "Tatton amendment", as opposed to "amendments in tatters", the fate of many of the amendments proposed by the hon. Gentleman in Committee. When people at bus stops discuss the role of the pension protection fund ombudsman, the name of the hon. Gentleman will fall from their lips.
	Clauses 196 and 197 provide for the pension protection fund ombudsman to consider and make determinations on reviewable matters and complaints of maladministration that have been referred to him following the two-stage PPF internal review process. From time to time, the pension protection fund ombudsman, to whom I shall refer henceforth as the PPFO, may be asked to make a determination on a case involving a complex point of law on which he or she needs advice. The new clause enables the PPFO to refer such questions to the High Court or the Court of Session in Scotland. The PPFO will take the Court's ruling into account when making his or her determination. That approach is in line with the powers in place for the pensions ombudsman under section 150(7) of the Pension Schemes Act 1993, which enable him to seek advice on points of law or to clarify the limits of his jurisdiction in a particular case.
	I have acknowledged the role of the Opposition in bringing forward the new clause, but we have extended the scope of their original amendment by enabling the PPFO to ask the Court's advice on points of law arising from an alleged maladministration case as well as a reviewable matter. We believe that is the right approach, given that complaints of maladministration can progress into a reviewable matter question involving a point of law and vice versa.

Nigel Waterson: As the Minister has pointed out, the new clause builds on an amendment that we tabled in Committee. However, I should not like Members to run away with the idea that that was a typical theme of our proceedings. I cannot help but feel that, had Ministers been more open to accepting our amendments, the Bill that leaves this place would be much better.
	The whole issue of the PPF ombudsman—or the PPFO, as we must now refer to him—is just one part of the rather complex bureaucracy that the Bill will erect. It is a matter of great sadness, especially to the hon. Member for Northavon (Mr. Webb), that no amendment pertains to the determinations committee: those faceless men and, no doubt, women who will have a major role to play in enforcing the Bill when it becomes law.
	As the Minister pointed out, we have my hon. Friend the Member for Tatton (Mr. Osborne) to thank for the new clause. It is fair to say that, when he argued the case for the proposal in Committee, he seemed to be pushing on a relatively open door. It seems clear—the Minister confirmed this in his opening remarks—that there will be not only a pensions ombudsman, as currently, but a PPF ombudsman. It is important to realise that we are producing ombudsmen and women in significant numbers these days.
	Just to confuse matters, in another rare moment of openness to argument from the Opposition in Committee, Ministers conceded that they were seriously considering the prospect of that being one and the same person. I do not know how far the discussions with the current ombudsman have progressed, but that suggestion would make a great deal of sense because a lot of the functions are very similar. It seems a little odd to reinvent the wheel and have a completely different ombudsman for the PPF, along with all the associated administration.
	As the Minister indicated, the only point behind amendment No. 538, which we moved in Committee, was to try to ensure that a power that is already available to the pensions ombudsman would be available to the PPF ombudsman. In Committee, the Minister kindly said that he would consider that proposal if we withdrew that amendment, which we duly did, and it is now back in almost identical wording. As the Minister said, this is the Tatton amendment, and if my hon. Friend achieves nothing else in politics, which I think most unlikely, he will have this to tell his grandchildren about.
	We welcome the new clause. It started off as our amendment, so it would be churlish, even by my standards, to oppose it.

Chris Pond: I am delighted that the Opposition accept the new clause, which is based on their own original amendment. That comes as a surprise to us all.
	Question put and agreed to.
	Clause read a Second time, and added to the Bill.

Clause 97
	 — 
	Membership of the Board

Nigel Waterson: I beg to move amendment No. 25, in page 67, line 32, at end insert—
	'(4A)   Any person appointed as an ordinary member shall have knowledge and understanding of—
	(a)   the law relating to pensions and trusts,
	(b)   the principles relating to—
	(i)   the funding of occupational pension schemes, and
	(ii)   investment of the assets of such schemes, and
	(c)   such other matters as may be prescribed'.
	Again, this is an echo of an amendment that we tabled in Committee. On the face of it, the amendment might be thought wholly unobjectionable because all it modestly suggests is that members of the board
	"shall have a knowledge and understanding of"
	things such as
	"the law relating to pensions and trusts"
	and the principles for funding schemes and
	"the investment of the assets of such schemes".
	One would have thought that those were necessary requirements to become a member of the new organisation's board. Certainly, the feeling in much of the industry was that it would be worrying if those people did not have such qualifications—perhaps not all of them. One needs a suitable blend of people with knowledge of investment, funding and so on, and perhaps with a legal background. It is a matter of sadness—[Laughter.]—and of some hilarity to Labour Members, but lawyers occasionally have something to contribute.

John Robertson: Name them.

Nigel Waterson: The hon. Gentleman is putting me on the spot. Perhaps I could write to him.
	Although the Minister gave some explanation in Committee that the Government envisaged that the board members will have the knowledge to carry out their role and that they might undertake training, they seemed unwilling to say so in the Bill. They assume that the appointments procedure will ensure that people have the relevant qualifications. That is fine and I am delighted to hear it, but a further safeguard is needed. Those people will wield enormous powers and be in charge of enormous resources. There are concerns about their powers to make restoration orders and so on. Indeed, there is much controversy about that in the business pages of the newspapers. We need to ensure that the right people are in charge.
	I commend the amendment to the House, because it would set the minimum requirements for anyone who wants to become a member of the board. To put it bluntly, we do not want a bunch of the Prime Minister's cronies appointed. We do not want his former flatmates or his chums from the intelligence community. We want people with genuine independence and experience, with a genuine knowledge and understanding of their tasks.

John Robertson: I could not resist taunting the hon. Gentleman, and I have decided to participate in the debate.
	On the face of it, the amendment appears to be fairly innocuous. It says:
	"Any person appointed as an ordinary member shall have knowledge and understanding of . . . the law relating to pensions and trusts".
	The magic word "lawyer" comes to mind. My concern is no reflection on any hon. Member, especially my hon. and learned Friend the Member for Redcar (Vera Baird), who is obviously very good and much better than any Opposition Member.
	Why would we want lawyers involved? Is it because they know everything about the law and its intricacies? It has been said many times that if someone talks to two lawyers, he will get two different answers—so if we had half a dozen lawyers together, we would get half a dozen different answers and would never get anything accomplished. I would amend the amendment by stipulating "as long as it does not apply to lawyers". Perhaps then I would not have a problem with it.
	The amendment also refers to
	"the principles relating to . . . the funding of occupational pension schemes, and . . . investment of the assets of such schemes, and . . . such other matters as may be prescribed".
	Some of the people who would be qualified to take on the job are probably the same sort of people who caused the problem in the first place. Would you, Madam Deputy Speaker, want to employ a lawyer who caused the problem in the first place and ignore the people who are suffering? Trade unions and ordinary lay members should be on the board. It is important that ordinary people are represented. We talked at great length about what we are doing for the ordinary people. The same people should be on the board. It is important that they are listened to.
	I have once again made my point about lawyers. If they want to write to me and tell me what they do, that is fine; I shall write to them and tell them what they do not do. In that way, we will get on very well.
	My hon. Friend the Minister should not accept the amendment. It would encourage the people whom we least want to encourage to be on the board.

Peter Pike: The hon. Member makes an interesting point. Perhaps he would like to consider what happened as a result of the Belling pension fund fraud. The fund collapsed in 1992 and 200 people who went to prison for making it go bust were solicitors—legal people.

John Robertson: I thank my hon. Friend for that. He makes my case for me.
	Would the amendment have the effect of requiring people to take an exam to quality for the board? Would they have to do a written test to prove that they have the knowledge and capabilities to be on it?

Nigel Waterson: We are not suggesting an exam. The hon. Gentleman might wish to reflect on the fact that he is, presumably, supporting parts of the Bill that require trustees to have some qualification. I am relieved to hear that the trustees of our very own parliamentary pension scheme recently sat an exam, which they all passed.

John Robertson: I would like to find out how those people did in their exams and whether they got an A, B or C. Were they the best people available or were they the only ones available to sit the exam, which would mean that no one could fail them?
	The hon. Member for Eastbourne (Mr. Waterson) is trying to look after his own in the so-called innocuous amendment. He lambasted many of my colleagues in the trade union movement and, for that matter, ordinary people. I urge my hon. Friend the Minister to do exactly what I would do with it, and not accept it.

Steve Webb: As I often say before making a speech, I had not planned to say anything.
	The amendment is a tease because it requires the board of the pension protection fund to have at least the same knowledge as trustees of a scheme. Given that the PPF is a dirty great pension fund, in which the assets of wound-up pension schemes have been slopped together—presumably to be managed by someone and overseen by the board—I would be horrified if the members of its board did not know anything about pensions. Granted, they do not have to be lawyers; we do not expect trustees of our own scheme to be lawyers, although I suspect that many of them are. It would, however, be incredible if we did not expect PPF board members to have a basic knowledge of pensions law. We are in danger of forgetting the purpose of the PPF. Over time, its assets could build up substantially before they start to fall.

John Robertson: Lest I did not make myself clear, the board members do not have to be lawyers entrenched in pensions law. There are plenty of people in other spheres of business with similar experience. Trade unions deal with the trustees of pension funds. My hon. Friend the Member for Hamilton, South (Mr. Tynan) was a trustee of a pension fund, and he is one of the many people who have such experience. They do not have to be lawyers.

Steve Webb: The hon. Gentleman makes my point for me. Trade unionists who are pension fund trustees are already obliged under the Bill to satisfy provisions duplicated in the amendment. It is not unreasonable to expect trade unionists, members of the public or anyone else who takes responsibility for potentially billions of pounds-worth of assets to be clued up about pensions so that the workers, about whom we are all worried, get their pensions. I accept that they do not have to be lawyers, but the amendment does not specify that they should be.

Michael Weir: rose—

John Robertson: The hon. Gentleman is a lawyer.

Steve Webb: I had better be careful, then.
	If the amendment did make such a requirement, every trustee of every pension scheme would have to be a lawyer, which is clearly not the Government's position.

Kevin Brennan: Is the amendment not otiose, because appointment to the board of the PPF is a public appointment whereas the appointment of trustees of pension schemes is a private appointment?

Steve Webb: I cannot understand why we would want to allow the public sector to employ someone who did not understand what a pension was, what investment returns were, or how the law worked.

Kevin Brennan: Would appointments not come under the remit of the Commissioner for Public Appointments, and would therefore have to meet certain minimum standards in any case?

Steve Webb: They probably would, but I am not sure whether that is wholly reassuring.

Michael Weir: The hon. Gentleman and the Members arguing against him are all dancing on the head of a pin. I agree with some of the remarks of the hon. Member for Glasgow, Anniesland (John Robertson), but as a lawyer I would be horrified to be asked to advise on pensions law. The assumption that all lawyers know a great deal about pensions law is as flawed as the assumption that trade unionists, for example, do not know about it. Individuals who deal with pensions day in, day out, are the proper people to serve on the board. They should have a knowledge of pensions, whether lawyers or otherwise.

Steve Webb: We are in danger of becoming obsessed with lawyers. The amendment does not refer to lawyers. It merely refers to knowledge of
	"the law relating to pensions and trusts".
	I cannot remember the number of members of the board of the pension protection fund. I am open to hand signals, as long as it is not two. The serious point is that if we are speaking about a fairly small number of appointments—10, say—it is entirely appropriate to expect just 10 people to have those skills.
	We were worried about the requirement as it relates to trustees. I know that the hon. Member for Bournemouth, West (Sir John Butterfill), who represents our interests as chairman of the trustees of the parliamentary fund, is worried about such an amendment as it relates to every trustee of every scheme, because that would mean that vast numbers of people had to have the required level of knowledge. Surely if we are talking about only 10 people, it is not unreasonable to suppose that we could find 10 people who knew what they were talking about to run the PPF.

Peter Pike: I was elected as a director of the Philips pension fund before I became a Member of the House. Immediately after I was elected, I and all the members of the work force who had been elected as worker representatives received the necessary training. If someone from the trade unions or the work force did not meet the criteria, would it not be possible to provide them with training? They do not necessarily need to be fully qualified before they become a member of the board.

Steve Webb: That is a fair point. The hon. Gentleman had the joy of not being a member of our Committee. The point was raised in Committee on the set of provisions relating to general trustees. As I recall, it was acknowledged that a member of the board would not have to have the required knowledge and understanding on day one, but would be expected to acquire it, as the hon. Gentleman suggested.
	Whereas trustees are generally volunteers and may not be paid, I would guess, in the case of many pension funds—

Bill Tynan: I thank the hon. Gentleman for giving way. There was legislation to ensure that trustees were representative of employees as well as management in the company. There was also legislation to ensure that people had the opportunity to become trustees and to be trained after they were elected to the board. The hon. Gentleman seems to be talking himself into supporting the amendment. I would be concerned about that because it is so specific, and there is a danger that it would prevent people from being involved.

Steve Webb: I will not drag the debate out more than an hour and eight minutes. The arguments that we are now hearing would apply far more to what is in the Bill, which hon. Members on the Government Benches have accepted as requirements of every trustee of every pension scheme in the country, whereas the amendment applies only to the 10 professionals, every one of whom will presumably be paid a salary—a good salary. If Labour Members are willing to accept the conditions in relation to vast numbers of volunteers, we should surely accept the same condition in relation to perhaps 10 well-paid professionals who will be in charge of a very large pension fund.

John Robertson: The issue of professionals has re-entered the discussion. We want everyone whose pension might be affected to be included. Trade unions do that for the ordinary worker, as do lay people who are members of the board of pension trustees. If we go down the road of professionals, the lay person would automatically be discounted, unless he happens to be a lawyer.

Steve Webb: Perhaps I am not making myself fantastically clear. I appreciate that the debate has a slight "after the Lord Mayor's show" feel to it, but I shall try to clarify my argument. The hon. Gentleman must be happy with the provisions in the Bill relating to trustees, because he voted for them or failed to vote against them. They provide the same hurdle for trustees—all trustees—and he is happy with that. Lay people do not necessarily have those skills, but they can acquire them although they are not lawyers. The hon. Gentleman does not regard that point as a particular hurdle, but he thinks that expecting the people who are paid to look after the pension protection fund to know what they are doing is a huge hurdle.
	I have clearly dismally failed to make my point, but at least I feel better about it. It is entirely appropriate that the small number of people whom we expect to perform that important job—they will also be paid good money to do it—are as able to understand pensions and investments as the trustees of schemes up and down the land, which is why I hope that the hon. Member for Eastbourne does not withdraw his amendment.

Chris Pond: I must begin with a warning to my hon. Friend the Member for Glasgow, Anniesland (John Robertson), which was passed to me by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), who is a lawyer. My hon. Friend the Member for Glasgow, Anniesland asked the hon. Member for Eastbourne (Mr. Waterson) to write him a letter stating what he considers to be the good things about lawyers, but as the hon. Member for Eastbourne is a lawyer himself, my hon. Friend will probably be charged for it.
	The hon. Member for Northavon (Mr. Webb) will remember that the PPF board must have a minimum of seven members, whom we expect to be people of standing and understanding. It may well be that some of those people are trade unionists, but we do not expect members of the board to represent particular groups. They are there to represent the interests of pension members across the board and nobody will be ruled out from that process.
	This afternoon, the hon. Member for Eastbourne and I hardly need to be separated by the red lines on the carpet that are two sword lengths apart. The Opposition originally proposed the measure in Committee, and we entirely agree with the principle. The hon. Member for Tatton (Mr. Osborne) is probably not in the Chamber this afternoon because he is on the phone sharing his joy with the newspaper in Tatton that the Government agree, in principle at least, with so many of his proposals.
	Having said that, I ask the hon. Member for Eastbourne to withdraw the amendment because it is not necessary. The members of the PPF board will be appointed to a number of specific roles, and the appointments must be based purely on the knowledge and experience required to fulfil those roles. The members of the board will have or will be able to acquire the knowledge and understanding to carry out those roles properly. That approach, along with a range of other measures that we have introduced, ensures that board members must not only demonstrate their knowledge in order to be appointed to the board but, as the hon. Member for Northavon says, develop their knowledge and understanding over time. Board members' performance will be reported on regularly, because the Government are keen on performance standards and we want board members' performance standards to improve, just as we want improvement in other areas of public service.
	The package of measures achieves the same outcome as the amendment, and I would even argue that it goes further than that.

Steve Webb: By refusing the amendment, the Minister leaves himself the option of appointing people who do not satisfy, or who would not be expected to satisfy, those conditions. Why does he want to keep that option open, because that is the effect of refusing the amendment?

Chris Pond: We have not left ourselves the option of appointing people who do not fulfil the requirements. We expect PPF board members to fulfil the requirements in the same way as trustees.

Kevin Brennan: Is it not the case that if these are indeed public appointments—perhaps my hon. Friend can confirm that—it is a legal requirement that they be appointed on merit, and will therefore have to be the best people for the job?

Chris Pond: My hon. Friend is correct on that, as on so much else this afternoon. Of course, these appointments will be made through the normal procedure for public appointments, and we will expect the people so appointed to have the abilities and characteristics that are necessary to fulfil their function and to ensure that the PPF provides the level of protection to scheme members that hon. Members want it to achieve.

Nigel Waterson: It does not take much to reveal the latent hostility towards lawyers that exists in some parts of this House. I have been accused of many things—in this case, of looking after my own. It might interest the hon. Member for Glasgow, Anniesland (John Robertson) to know that although I am indeed a lawyer, I am a shipping lawyer, so I doubt that I would be much use to the average pension fund and I would certainly not be much use to the board, although I suspect that the prospects of my being appointed to it under the current regime are pretty slim. [Interruption.] It is suggested that I could pass the exam. I have passed lots of exams in my time, but that does not make me a good person.

Steve Webb: Do not be so hard on yourself.

Nigel Waterson: I thank the hon. Gentleman. I am sorry, but it is getting late in the day and my enthusiasm for pensions is waning rapidly.
	In their fury at the legal profession, hon. Members misread my amendments. I am not suggesting that a board member has to be a qualified lawyer, actuary, accountant or anything similar, or even that he has to possess an AS-level in pension fund management, but merely that he has to have a knowledge and understanding of some or all of these matters. I presume that board members will be screened. I am sure that Ministers are not going to get them out of a bus queue, although that must be where they get Ministers from.

Malcolm Wicks: We are very ordinary people.

Nigel Waterson: Who could argue with that?
	These people will probably be quite well paid—unlike, as the hon. Member for Northavon (Mr. Webb) pointed out, many current trustees of pension schemes, particularly smaller ones, many of whom are volunteers. One of the many unfortunate side effects of the Bill is that trustees of pension schemes will be professionalised as a result of the very firm, detailed and onerous requirements placed on them, which are supported by, or at least acquiesced in, by the hon. Member for Glasgow, Anniesland. Like the hon. Member for Northavon, I am bemused as to why the people running this super-pension fund should be any different.

Vera Baird: Before I go any further, the hon. Gentleman does not have to believe a word I say, because I am of course a lawyer.
	There is a major distinction to be drawn here. People who are appointed to be trustees may not necessarily have the kind of qualifications or understanding that the hon. Gentleman would require, but provisions exist for training them. They should be representative. It will obviously be necessary to ensure that a person is capable of running the pension fund before appointing them to do so. The word "otiose" was used before, and that is the right word to apply to the amendment. The hon. Gentleman is worrying about nothing.

Nigel Waterson: "Otiose" is one of those good lawyer's words that 90 per cent. of the population do not understand. "Surplus to requirements" is probably a better way of putting it. I take the hon. and learned Lady's point. I may be making a fundamental error in referring to a pension fund or a pension scheme, because when the Minister was asked in Committee, in the light of the deep concerns of the actuarial profession, who rarely get very excited about anything, whether this was an insurance scheme or a pension fund, he famously replied, "Neither." We still do not know the real answer to that question. Regarding these people as super-trustees of a super-pension scheme may be misleading, but they will have, on any view, some very significant responsibilities.
	As is often the case with amendments, it comes down to whether the proposal is needed or otiose. In Committee and today, the Minister has assured me that he agrees with every word of the amendment and that it deals with matters that not only should but will be required of board members. I am prepared on this occasion to take him at his word. However, if any former flatmates of the Prime Minister pop up on the board I shall have something to say about the matter, possibly in an Adjournment debate. For the moment, I beg to ask leave to withdraw the amendment.
	Amendment, by leave, withdrawn.

Clause 99
	 — 
	Board's functions

Amendment made: No. 97, in page 68, line 19, after 'Part' insert
	'and any provision in force in Northern Ireland corresponding to it'.—[Mr. Pond.]

Clause 102
	 — 
	Investment of funds

Amendment made: No. 98, in page 70, line 1, leave out from 'Fund)' to end of line 2.—[Mr. Pond.]

Clause 118
	 — 
	Protected liabilities

Amendment made: No. 99, in page 79, line 41, after 'in' insert
	'sections [Reviewable ill health pensions] to [Interpretation of sections [Reviewable ill health pensions] and [Effect of review]] and'.—[Mr. Pond.]

Clause 124
	 — 
	Board to act as creditor of the employer

Amendment made: No. 100, in page 83, line 24, leave out 'owed' and insert 'due'.—[Mr. Pond.]

Clause 125
	 — 
	Payment of scheme benefits

Malcolm Wicks: I beg to move Government amendment No. 101, in page 84, line 7, leave out 'for that period'.

Mr. Deputy Speaker: With this we may take the following: Government amendments Nos. 102 and 103.
	Amendment No. 26, in page 232, line 15 schedule 7, leave out from 'means' to end of line 17 and insert '90 per cent.'.
	Amendment No. 27, in page 232, line 24 schedule 7, leave out sub-paragraph (7).
	Government amendment No. 144.
	Amendment No. 28, in page 247, line 42 schedule 7, leave out '2.5 %' and insert '5 %'.
	Amendment No. 31, in page 249, line 19 schedule 7, leave out paragraph 29.

Malcolm Wicks: First, I will deal with the Government amendments, which are all minor drafting amendments.
	Amendments Nos. 101, 102 and 103 amend clause 125 on the payment of scheme benefits. Amendment No. 101 clarifies the wording of subsection (2). Amendment No. 102 ensures that the power to make regulations permitting postponement of a person's entitlement to a pension during the assessment period may also permit postponement of a person's entitlement to a lump sum from the scheme.
	Amendment No. 103 provides a definition of the term "normal pension age" that is used in clause 125(4). Amendment No. 144 clarifies the drafting in paragraph 14 of schedule 7 regarding the calculation of the revaluation amount in determining entitlement to lump sum compensation under paragraph 14. I ask hon. Members to accept the Government amendments.
	Amendment No. 26 would reduce the pension protection fund compensation from 100 per cent. to 90 per cent. for scheme members over normal pension age, members under normal pension age who receive a pension on the ground of ill health and those who receive survivors' benefits before the assessment date. The amendment would mean that everyone would get the 90 per cent. level of compensation.
	Amendment No. 27 would increase the level of PPF compensation to 100 per cent. for those members under normal pension age at assessment date who had taken early retirement but not on the ground of ill health. Amendment No. 31 would remove the Secretary of State's power to vary the PPF compensation percentages.
	When a scheme enters the PPF, the majority of those members who already receive their pension will get 100 per cent. compensation. We believe that there are compelling reasons why older people who are some way into their retirement, survivors who already receive benefits and those who have retired early on the ground of ill health should receive the 100 per cent. level of compensation. The hon. Member for Eastbourne (Mr. Waterson) will have to explain why he does not agree with that. Those people are significantly less likely to be able to find work again, and so, crucially, the current priority order rules fully protect them.
	Amendment No. 26 would cut the benefits of existing pensioners if their scheme should enter the PPF by reducing the 100 per cent. level of compensation to 90 per cent. For the reasons that I have just outlined, we do not consider such an approach to be fair. We also believe that the arguments for less than 100 per cent compensation for those over normal pension age, survivors who already receive benefits and those who have retired on the ground of ill health are less relevant.
	One of the purposes of the 90 per cent. level of compensation is to give an incentive to the employer, company decision makers and those with influence, most of whom are much more likely to be below the scheme's normal pension age and may have an interest in keeping their scheme out of the PPF.

Steve Webb: I understand that the reason for the rule about people who are "retired" but under normal pension age is to try to stop people in the know getting 100 per cent. rather than 90 per cent. However, what about the innocent person under the normal pension age who draws a pension for reasons other than health grounds? Perhaps that person has taken an actuarially—I got into trouble for using that word yesterday—reduced pension. Why should not such people get 100 per cent. of that pension?

Malcolm Wicks: In taking this approach, we want to make the PPF regime as simple as possible so that it can be administered inexpensively. We are keen that those who are not of pensionable age should get 90 per cent. I accept that there is a broad-brush nature to this approach and—inevitably, I guess—some rough justice, but we do not want to get into a situation in which we have to assess individual entitlements in the way that the hon. Gentleman suggests.
	The 90 per cent. level of compensation also prevents abuse from members taking early retirement other than on the ground of ill health, and guards against levy payers subsidising schemes that manipulate the rules to gain access to a 100 per cent. level of PPF compensation. If the PPF were to apply 100 per cent. compensation to those scheme members who have taken retirement early on grounds other than ill health, there would be an approximate increase to the PPF levies of £10 million per year. Therefore we should not favour a single percentage level for all, as that would unfairly cut the benefits of existing pensioners and remove an incentive for employers, company decision makers and influencers to keep their scheme out of the PPF.
	Amendment No. 31 seeks to remove the Secretary of State's power to vary the levels of PPF compensation percentages. That would remove one of the checks and balances, albeit one that would be used only in the most extreme cases, but it would undermine levy payers' confidence in the sustainability of the PPF for the long term. Pension scheme members can have confidence in the protection that the new PPF will provide, but businesses also need to have confidence that checks and balances are built into the structure of the PPF to ensure that the cost of the levy cannot rise exponentially in the future.

Steve Webb: Does the Minister not accept that there is already a safeguard against what he just called exponential rises, because there is already a cap on the increase from one year to the next? The costs cannot go up exponentially anyway, so why do we need this further provision?

Malcolm Wicks: It is a question of having the right number of checks and balances in the system, and we think that this is an important additional one.

Nigel Waterson: The Minister says that this measure would come into effect only in extreme circumstances, but presumably the only relevant circumstances—whether we characterise them as extreme or otherwise—would be that there was not enough money in the PPF. If the Government are intent on saying that they are not standing behind the PPF, surely those are the only possible circumstances. We can call them extreme or not, as the case may be, but whenever and however they arose, those would be the circumstances.

Malcolm Wicks: We are now rehearsing issues that we have rehearsed many times.The Government are confident that the way in which we are establishing the PPF, with the levy system and the ability of the board to increase the levy subject to certain limits—another check and balance—will give us a PPF that is properly funded and which can meet ongoing pension liabilities. We are obviously confident about that, but it is prudent to safeguard against extraordinary eventualities. That is why we are putting these checks and balances into the system. We can argue whether the figure should be 100 per cent. or 90 per cent., but one argument for the 90 per cent. is simply that those below retirement age are, by definition, in a better position to find new work and to supplement their retirement income than those who are above retirement age. This is obviously a broad-brush approach and there will be some rough justice, but the amendment would remove one of those checks and balances—albeit one that would, as I have said, be used only in the most extreme cases—which would undermine confidence.
	The members of the PPF board will have the relevant expertise and information available to oversee the PPF's investment strategy and set the pension protection levies at appropriate levels to ensure that the PPF has sufficient funds to pay out compensation. It is important to point out that the PPF will have recourse to a number of measures that must be implemented before reduction of compensation can ever be an option. For example, the PPF will be able to raise the pension protection levies, reduce revaluation and indexation, or borrow commercially. In fact, the compensation percentages can be varied to below the level currently set out in schedule 7 only when revaluation and indexation have been reduced to nil.
	The Secretary of State can make a reduction or an increase in compensation only if a recommendation to that effect is made by the board. The Secretary of State will give extremely careful consideration to any such proposal from the board, which can be made only following consultation. In addition, any change to the level of compensation would have to be subject to the affirmative resolution procedure. The clause makes it clear that indexation and revaluation must have been reduced to nil before the percentages of compensation payable by the board can be reduced below 100 per cent. to 90 per cent., and that indexation and revaluation cannot be reapplied unless those original percentages are in payment. I am sure that hon. Members will agree that a balance is needed between building in constraints to reassure levy payers that costs will not rise beyond control and allowing the PPF flexibility to raise the funds that it needs to reassure members that they are sufficiently protected. Let us not forget that paragraph 29 also provides for compensation percentages to be increased. Amendment No. 28 seeks to increase the cap on indexation to 5 per cent.
	Legislation was introduced in April 1997 requiring certain occupational pension schemes to provide indexation capped at 5 per cent. on all pension accruals. This Bill seeks to reduce the indexation capped at 2.5 per cent. on all future accruals through clause 246, which relates to the annual increase in the rate of certain occupational pensions. Clause 247 is also relevant. It would therefore be inconsistent with other provisions in the Bill were the PPF to provide indexation greater than 2.5 per cent. By restricting the amount of indexation paid, the PPF is better able to predict its liabilities and plan ahead financially. In terms, that means that the PPF can provide consistent and meaningful compensation to scheme members.
	Were indexation increased from 2.5 to 5 per cent. on all post-1997 accruals, we estimate that the PPF levies would increase by approximately £100 million per year. It is not clear to me whether that is a new spending commitment—the hon. Member for Eastbourne will wish to tell us. We must not lose sight of the fact that businesses must ultimately bear the burden of financing PPF levels of benefit, and although we aim to provide meaningful compensation, we must balance that with affordability. In addition, from 10 May 2004, as we know, the priority order has changed for schemes that wind up, giving greater priority to scheme members who are under normal pension age by dealing with them before the indexation of pensioner members. I ask the hon. Gentleman to consider withdrawing the amendments.

Nigel Waterson: Let me reassure the Minister that these are probing amendments, but what they are designed to probe is an important issue, which has emerged as a major theme in Committee and will certainly be a major theme on Third Reading—the difference between spin and reality as to the sort of guarantee or safety net that this Bill is supposed to deliver.
	I was slightly amused in relation to two of the factors on which the Minister was trying to rely, in terms of availability of the right decision making and resources. First, there were the qualifications of members of the board. We have just had that debate. Let us hope that they are well qualified, as that will not be stated in the Bill. Secondly, he talked about commercial borrowing. I have not had time to look up the reference, but the Minister was pretty adamant in Committee that that would only be for relatively short-term cash-flow requirements, and that the PPF would not be expected to borrow massively on the markets. Indeed, it would be odd if it were being given that power without some sort of Treasury guarantee.
	That brings me on to my main point, before I deal with the specific amendments in more detail: there are only limited numbers of directions from which resources can come to the PPF. There are the assets that it may take over from schemes that, by definition, are short of assets, and the investment income that it makes from them. There is the levy income, which we know is reduced in the early stages in any event, certainly in the first year. There may be some short-term borrowing, but we can discount that. Certainly, no public money is to be made available, as I understand it. This is, then, an organisation with finite resources. I do not say that that is necessarily a bad thing, but it is the background against which the amendments must be examined.
	I can say immediately that I have no difficulties with amendments Nos. 101, 102 and 103. Our proposal to substitute "90 per cent." for "100 per cent." is really an attempt to draw out the justification for the distinction between those who are not retired and those who are. I did not get to the bottom of that in Committee. One late entrant in the reasons race was that there would somehow be an effect on key decision makers who would otherwise go out of their way to arrange matters so that a particular company's pension scheme did not function properly. I must say that I think that a rather desperate argument. I do not see why there should be a distinction. Ideally all involved should receive 100 per cent., because the Government are offering a guarantee.
	The Minister talks of rough justice. That brings me to the question of indexation, and the 2.5 versus 5 per cent. The Minister talks as if we were trying to do something new and different. All we are trying to do is reinsert the current 5 per cent. figure. We had a lengthy discussion of the issue in Committee. The 2.5 per cent. figure may be all right for the moment, while inflation is relatively low, but every time I pick up a newspaper I see talk of a sharp rise in inflation, mainly because of oil crises. No doubt the Chancellor himself is getting a bit worried. Why seek to reduce the existing figure to 2.5 per cent. at this stage of the game, when there seems to be a reasonable consensus—certainly in the industry—that 5 per cent. is sensible? The Minister has put it to me in terms of a public spending commitment, but I would put it the other way round. Given that the purpose of a Bill that has been allotted 22 sittings in Committee and three days on Report is to restore confidence in pensions, why should there be all this cheese paring in people's entitlements?
	A closely related aspect is the cut-off date for pension increases. In its briefing, Age Concern has expressed its own worries. It says that the actuaries Lane Clark and Peacock and the Occupational Pensioners Alliance estimate that some pensioners may receive only 70 to 80 per cent. of their total pension promise under the PPF. It refers to pensioners who retired before 6 April 1997. It states:
	"We believe the Bill should be changed so everyone can be entitled to 100 per cent. compensation".
	That is the point I am trying to make. I cannot see why there should be either the 90 versus 100 per cent. distinction or the little distinctions buried in the small print, not immediately visible to the average leisured reader, which will cheese pare away the amounts that people will receive in real life.

Steve Webb: It would not be in the spirit of today's debate to carp at this juncture, but on the one hand the hon. Gentleman asks why everyone cannot have 100 per cent. compensation and 5 per cent. indexation, while on the other hand he has tabled amendments designed to cap the levy so that there is no burden on business. Surely the flip side of what he is demanding is an even greater burden on business about which, presumably, the Conservatives will be worried tomorrow. What is his position?

Nigel Waterson: Unlike the Liberal Democrats, we are concerned both about pensioners and about business and industry. We think that there is a balance to be struck. I said in Committee, and will repeat on Third Reading, that the Government approached the whole business the wrong way round. One reason why the Bill has been overshadowed by our earlier debate about the 60,000 people whom it would not compensate, many of whom may still not be compensated—we must await the small print—is that the Government were desperate to get the legislation on the statute book so that they could say that they had set up the PPF. What they should have done was take a more measured approach to the legislation, which presumably will be there for a long time, and initially tackle the problem of the people who have already lost out. The American scheme, which was a model for this scheme, did not pay out any moneys for several years, as I understand it, because it was building up its resources. I think that we will end up with a very rickety PPF in the early stages, potentially with claims waiting to fall upon it and insufficient resources to meet them.
	That brings me neatly to the most important of this group of amendments, amendment No. 31, which relates to the Government's power, tucked away in paragraph 29 of schedule 7, to reduce payments. The Minister says, accurately if not fairly, that there is also the power to increase compensation. However, we are really talking about an overweening power of the Government to reduce payments. On the one hand, the Government say that they will provide a complete safety net, a guarantee for people in these pension schemes, so that if the unpleasant things that have happened to people in the past, particularly the recent past, happen again, people will be fully protected. However, on the other hand, they say in the small print that there are going to be caps, that there is a 90 per cent. figure for people who have not actually retired, that they are going to fiddle with the indexation, and that they will take the power to reduce the compensation and benefits paid under the legislation.
	It is no good the Minister saying, as he did, that the Government will use that power only in extreme circumstances. As I tried to point out in an intervention, I presume that the only circumstances in which that will happen will be where there are not enough resources in the fund. I cannot think of any other circumstances in which that will happen. That might be an extreme circumstance, but it is the only one that could, I imagine, prompt the operation of paragraph 29 of schedule 7. If the Government are really persisting with the notion that the PPF is a stand-alone fund with no Treasury backing and no Treasury guarantee, and that it will have to stand on its own feet, those are the circumstances that will prompt a reduction in benefits.
	It is no good Ministers saying that they are providing a full guarantee and safety net. We visited the BBC website the other day, which said bluntly that people will get 90 per cent. if they are not retired and 100 per cent. if they are, with no qualification. We have had to write it a letter pointing out that that "ain't necessarily so". Ministers should be more up front. They were more up front in Committee, because they had no alternative, but we need to get the message across to people out there in the real world that this is not a full guarantee. To use the Minister's phrase again, there is an element of "rough justice". That is the point behind our probing amendments, and I commend them to the House.

Steve Webb: This is an important group of amendments, despite the stage in the process of assessing the Bill that we have reached. As the Minister says, the Government amendments are largely technical. We have no problem with them.
	I want to address two of the amendments of the hon. Member for Eastbourne (Mr. Waterson): amendments Nos. 27, on the issue of 90 per cent. and 100 per cent., and 31. I am sure that the hon. Gentleman's notes said this, but he forgot to say that amendment No. 31 was a Liberal Democrat amendment in Committee. I take it that, imitation being the sincerest form of flattery, he has brought back our amendment as a Conservative one on Report. I have certainly not changed my view that amendment No. 31 is very necessary and goes to the heart of the Bill, because it essentially relates to the fact that the Government will not act as lender of last resort to the PPF, which will have to go elsewhere. I shall come to amendment No. 31 in a moment.
	I deal first with amendment No. 27, which is on the issue of 90 per cent. and 100 per cent. One can see a certain amount of logic in saying that people who have already retired cannot do anything about their predicament. So if their employer becomes insolvent, the scheme does not have enough money and the pension protection fund takes over the scheme's liabilities, it is reasonable for retired members to expect to get their full pension because, essentially, there is nothing else they can do.
	It is important to remember that even that statement needs qualifying. The question is—the Minister will doubtless intervene if I am wrong—100 per cent. of what? Even 100 per cent. will not necessarily constitute the entire pension that a person was expecting to get, and for two reasons. First, they will get 100 per cent. of the pension that they were expecting to get, excluding indexation for pre-1997 rights. In other words, even if the scheme of which they were a member offered them indexation on pre-1997 rights, the PPF will not. So there will be a set of people going into the PPF who will get a lower pension over time than they would have received had their existing scheme continued.
	To some extent, this has been a theme of the day. Even now, to talk of guarantees and 100 per cent. is somewhat dangerous and potentially misleading. The literature that the Government send out to members of schemes who, in effect, will become members of PPF schemes will need to be explicit in pointing out that they will not get 100 per cent; otherwise, we could have a repetition of what happened with inherited SERPS—the state earnings-related pension scheme—whereby everybody in this place knew what had changed, but nobody else did. The official literature sent to SERPS members did not explain what had happened, and in the end the Government had to point out that people had been misinformed, and had to spend billions of pounds on putting matters right. Our discussions have given rise to one or two, albeit charitably intended, warnings. The Government need to look very carefully at the way in which they communicate with PPF scheme members. They need to realise that they will not necessarily get 100 per cent., if they were entitled to anything other than post-1997 indexation.
	Moreover, such people will not get 100 per cent. anyway if, for example, their scheme includes particular provisions relating to survivor's benefits or to unmarried spouses. We touched on this issue in Committee, and I suggested then to the Minister that the PPF, which presumably will roll forward over decades, should be a forward-looking scheme that reflects best practice in the private sector, rather than a 1940s view of society. The 100 per cent. provision ought to match best practice in the occupational sector. For example, if a scheme provides for a surviving unmarried partner, the PPF should do the same.

Malcolm Wicks: It might help our deliberations on Report if the hon. Members for Northavon (Mr. Webb) and for Eastbourne (Mr. Waterson) cared to cost their proposals and to tell the House where the money would come from. I am advised that 100 per cent. compensation for all and indexation capped at 5 per cent. would add £200 million a year. Would the hon. Gentlemen raise the levy to raise that money, or would they make an Exchequer contribution? The House should know whether the Opposition do occasionally cost their proposals.

Steve Webb: The Minister's intervention may well have been inspired, but it does not relate to anything that I have said so far. My point is that the terms "100 per cent." and "90 per cent." create a particular mental picture; indeed, that is what amendment No. 27 is all about. Those who listen to our deliberations—poor souls!—will get the impression that the PPF will provide full compensation. I have tried to illustrate through two particular cases that "100 per cent." does not mean 100 per cent., and it is very important that people should not get the impression that it does. Even raising the rate from 90 per cent. to 100 per cent. would not mean full compensation, because of the exceptions that I have mentioned.
	Even if we were to raise the rate to 100 per cent., as amendment No. 26 would do, we would still not be providing full cover. But the key question, which amendment No. 27 addresses, is: who gets 90 per cent. and who gets 100 per cent.? We are agreed that people who have already retired will get 100 per cent., even though 100 per cent. is a rather limited concept. I am not uncomfortable about people who have not retired—they are still working— getting 90 per cent., but the nub of the amendment is about the people in between; that means people below the normal pension age of the scheme who might be drawing a pension. If the Bill is not altered as the amendment suggests, they will receive only 90 per cent. of their pension. The question is whether that is fair.
	The Minister's response was that it was a moral hazard point—something that the Government appear to have been fond of during the Bill's passage. Sometimes it happens that a company director, perhaps in his early 60s and seeing that things are going wrong with the company, decides to retire, even though he has not reached the normal pension age of the scheme. He applies to the scheme for retirement benefits and then, mysteriously, the company winds up the next day. Lo and behold, he is in the 100 per cent. rather than the 90 per cent. camp. That would certainly apply under existing rules about wind-up. Before the PPF is introduced, such a person falls into the favoured rather than the unfavoured category. The Government appear to be saying that, to avoid that happening, they will treat anyone under the normal pension age—whether retired or not—as being in the 90 per cent. category.
	The point that I put to the Minister in my intervention—I have to say that I was not convinced by his response—was that the provision amounted to a sledgehammer. I am not sure whether sledgehammers can catch rotten apples, but this one appears to be trying to catch the odd rotten apple, while at the same time hitting many deserving people. Leaving aside ill health—it is dealt with in a separate part of the Bill—it might affect people who, for perfectly good and proper reasons, have taken early retirement at an actuarially reduced level. They then find that that level of pension, already below the norm, is reduced by a further 10 per cent. As I understand it, that is what the Government's proposals will do. The people affected are living on pensions that are already fairly modest, perhaps because they have been drawn early on account of family circumstances.
	Let me provide an example to explain why such people are important. Someone could take an early retirement pension to look after a spouse and become a carer. They need money to live on and they cannot wait until they are 65. They have to stop working so they draw an early retirement pension at, say, 62. If the firm goes to the wall, they may believe that the PPF into which their employer had paid PPF levies will provide them with insurance, effectively replacing the pension. However, the PPF may come along, under which they can be paid only 90 per cent., not 100 per cent. The critical point is that that will not apply just for one year, but for ever—an issue that has not emerged from our debate so far.

Malcolm Wicks: The hon. Gentleman seems to make no allowance for the fact that, where a company pension scheme goes bust and there are relatively few assets, people could be faced with receiving only 20 per cent. of their pension rights. Does the hon. Gentleman not agree that, if such people could receive 90 per cent. under the PPF, they might be rather pleased that we legislated to set it up?

Steve Webb: I wonder whether the Minister has misunderstood me. My illustrative people are a man in his early 60s or a woman in her late 50s who give up work to become carers. When the firm goes to the wall, such people are, under the present regime with the present wind-up rules, in the privileged category that gets first call on the fund. The problem is that those people might get 100 per cent. and the workers next to nothing. If there is absolutely no money in the fund whatever, of course the Minister is right. Generally, however, those people will receive privileged treatment.
	My key point is that the Government are using the rule pertaining to people below normal pension age as an anti-moral hazard point, thereby catching many deserving good people.
	In all other parts of the Bill, the Government have introduced screeds of new clauses to deal with moral hazard. Instead of tarring everyone with the same brush, they have thought about how people might abuse the system, and defined very specifically what will not be allowed. For example, the Bill does not allow a person to set up a company with no assets to run a pension scheme, and then let that company become insolvent. The Bill explicitly prohibits that sort of moral hazard.
	Why do the Government not deal with the rotten apples by inserting a clause to prevent people from retiring the day before a company goes bust? That would be my strategy, and it would not have the damaging effect on carers that the Government's strategy will.
	Amendment No. 27 would protect the pension rights of what I imagine is a relatively small number of people, and is therefore desirable, but accepting it would mean that another anti-moral hazard provision would be needed. Perhaps the hon. Member for Eastbourne has something in mind: history shows that some people have abused the system by using their inside knowledge to put themselves in a favourable position just before a pension fund is wound up.
	That outrage is clearly unacceptable, and a further anti-moral hazard provision is needed to prevent it. However, the Government's proposal is much too broad, because it includes many worthy and deserving people.

Nigel Waterson: Before the Bill even appeared, many industry experts told me that the key would be the anti-avoidance provisions that it contained. However, they have appeared only at the end of the Bill's passage through the House, and many have not been subject to proper consideration, either in Committee or on Report. Surely the right way to go about this matter is to consult the experts who might advise people how to get around the so-called moral hazard provisions. That would be preferable to the scatter-gun approach adopted by the Government.

Steve Webb: That is an interesting question. Ironically, the Bill originally contained only one anti-moral hazard provision—the one that we are discussing now, which will catch many innocent people. All the other provisions were introduced at the last minute and, although I am sure that they are not merely an afterthought, their late appearance is rather worrying. But I do not want to go too far down that route.
	I shall be interested to hear the Minister's response to this debate. I was a member of the Standing Committee, which did not consider this matter in any depth, and I do not think that I am repeating debates that have been held already on this point. There are deserving people in the middle group—the pre-pension age retired, not workers or retired people over pension age—who would benefit from amendment No. 27. At present, they are being harshly treated, and I am sympathetic to the amendment for that reason.
	My main observations will concentrate on amendment No. 31, but I want to say a few words about amendment No. 28, which would replace the proposed 2.5 per cent. indexation level with a level of 5 per cent. The Minister said that that would not be possible as the Bill was premised on 2.5 per cent. indexation, but in fact it already contains a 5 per cent. indexation level in connection with revaluation. The Government seem to have forgotten to change that bit. They cannot argue that amendment No. 28 would not work because it is out of kilter with the rest of the Bill, or because inflation will be 2.5 per cent. always and for ever. The weakness of that argument is revealed by the fact that a figure of 5 per cent. already appears in the Bill.
	Funnily enough—and I made this point in an earlier intervention on the hon. Member for Eastbourne—an argument for taking 5 per cent. down to 2.5 per cent. could be made on the basis that the Bill places a burden on final salary schemes, in the form of the PPF levy. The flip side of that is that it will reduce the burden on such schemes through retirement benefits and indexation. The implication of amendment No. 28 is that the schemes would have to bear that burden but that they would not get the relief from it.
	The Secretary of State asked whether it would not be better to accept a trade off and have safe company pensions—albeit with more limited indexation through the PPF—rather than unsafe ones, and that is quite a strong argument. However, the hon. Member for Eastbourne needs to explain how, if he wants 5 per cent. indexation, he would reconcile that with his other amendments that try to reduce the burden on the scheme.
	My main concern is amendment No. 31, which is based on an amendment that we tabled in Committee. The hon. Member for Tatton (Mr. Osborne) made fun of the fact that we did not table very many amendments, but we tabled this one because we feel strongly about the issue. Amendment No. 31 would remove the Government's ability to undermine the PPF. Otherwise, it would not really be an insurance scheme, because the Government would be able to say, when the going got tough, that the benefits would be cut.
	This point only dawned on me during the recent exchanges—I had thought that the only way in which the Government could undermine the PPF was through the draconian and extreme process of affirmative resolutions in both Houses of Parliament to cut the 100 per cent. and 90 per cent. benefits: I had forgotten that before we got to that stage, the Government could have undermined the PPF in other ways. That is why amendment No. 31 is necessary.
	When times get hard, the PPF could put the levy up. It could also cut the indexation or the revalorisation, and that would mean a real cut in people's entitlements. I had thought, charitably, that the PPF was a strong guarantee of benefits, because although 100 per cent. did not quite mean 100 per cent. and 90 per cent. did not quite mean 90 per cent., only in extremis would the Government undermine the value of benefits. However, I had forgotten that the PPF, without recourse to this House, could cut indexation benefits. Why does that matter?
	The cut might be only 2.5 per cent. and we might think that we could live with that. However, people—especially women—might typically be retired for 20 to 25 years and if the non-indexation were to take place over several years, pensions could be cut by 10 or 15 per cent. Indeed, if the fund were not restored, that reduction in benefits could continue for the rest of the recipients' lives.
	When the Minister responds, I hope that he will tell us whether the PPF will be under any onus to restore lost indexation. Amendment No. 31 is about what will happen when times get tough and the indexation is knocked off. When times are good again, will the PPF be under an obligation to restore the indexation? People who pay the PPF levy through their employers will want to know what they can expect. Will the literature for the members of PPF schemes say that not only does 100 per cent. not actually mean 100 per cent., but the inflation protection may be undermined and never restored? If it does not say that, there is a danger that scheme members will be misled.
	What should be the appropriate response from the PPF when things get tough? The first step would be to put up the levy. We have already discussed the cap on increases in the levy and that could put a financial pressure on the fund that it might have to respond to in other ways. The Minister said that paragraph 29 of schedule 7, which the amendment would delete, is necessary because the levy could rise "exponentially". But there is a cap, so there is a limit on how much the PPF board can respond to adverse circumstances by raising the levy.
	If raising the levy does not deal with the financial shortfall, what would happen? In that case, the indexation or revalorisation would stop, and people would not have inflation protection. In other words, their pensions would be cut in real terms.
	At that stage the Government say that the next thing that the board can do is to borrow money on the market. In Committee, we discussed whether that was a good idea and it struck me as absurd that because of their obsession with privatisation the Government would prefer the PPF board to borrow money from the private market, with all the associated risk premiums and profit margins, yet the Government could raise the money more cheaply so that the taxpayer obtained better value.
	We would not necessarily want the PPF board constantly to have to come back to the Government, so it could perhaps borrow money for cash flow. I accept the arguments about the need for the board to be at arm's length from the Government, so we could allow it some day-to-day flexibility. However, it would be bad economics if, in the event of a serious financial crisis, such as a big steel company or a big airline going to the wall and making a large claim on the fund, the board responded by huge borrowing on the commercial markets. It would be bad public spending and the National Audit Office would probably have something to say about it.
	None the less, the Government say that the board can borrow on those markets and having done so it will have recourse to paragraph 29 of schedule 7. When the Minister responds, will he tell us whether there will be a limit on the PPF's borrowing powers? Why does it need such powers? If the Government think that it should be able to borrow money, it should be able to borrow as much as it needs. Why are the Government allowing the PPF to cut back further on the 100 per cent. or the 90 per cent? If the Government accept the principle that the PPF can borrow, what limits do they have in mind?
	Perhaps the Treasury view is that the debts of the PPF would be on the Government's balance sheet. Can the Minister tell us whether the Chancellor is worried that if the PPF borrows—because there is a financial mess—its debts will be on the public sector balance sheet and will feature in his borrowing figures? I presume that is why PPF borrowing is to be capped. If so, what would happen?
	Let us suppose that all avenues have been tried: we have cut indexation; we have borrowed money; we have increased the levy up to the cap and there is still not enough. What would happen then? There are two options. The first is in the Bill; it would be to ask the House and the other place to approve a cut in the pay-out—to reduce the 100 per cent. to 90 per cent. or the 90 per cent. to 80 per cent., or whatever the figure happens to be.
	People have been told not to worry because their pensions will be insured. The Secretary of State has told us that just as we can insure our holidays or our cars so, too, we can insure our pensions. But what sort of insurance company would say when someone made a claim, "Sorry, we're having a bad year and we're not going to pay you"? That would be outrageous and probably actionable. It would be wholly unacceptable for Direct Line to tell me, in response to a claim on my car insurance: "We're having a tough time. The roads have been icy lately so there have been a lot of claims. We can't increase premiums so we can pay you only 80 per cent. of the value of your car, not the 100 per cent. you were expecting." It would presumably be illegal to do that in the private sector, so why do the Government want such a power in the Bill?
	What is the alternative? What should have been in the Bill? The Government should act as lender of last resort. They would not make a grant, nor would they bail out the PPF in the sense of handing over public money from the taxpayer, but would stand ready to lend. That is what happens in terrorism reinsurance. The Government want there to be a market, but as insurers would be subject to calamitous risks if they offered insurance against terrorism, the Government say, "Don't worry. You offer the insurance and we'll stand behind it. If necessary, we will lend money to make the market work." That is precisely what the Government should do in this case.
	When things get difficult for the PPF, which may happen not in year one, but decades down the line, the Government should be there to say, "You've tried putting up the levy as much as you can", perhaps to the ceiling, "You've got rid of indexation"—although I have some reservations about cutting benefits at all, because even cutting indexation benefits is the same as ringing up Direct Line to be told that it will not pay out, so I am more worried about that provision than when I started considering these proposals—"You've done all those things. You may even have done some borrowing, but things are still tough. Right, we can borrow money more cheaply than you can. We will lend to the fund to tide it over, but the money will be repaid."
	I stress that the money would be repaid. It is not a public spending commitment, but a cash flow issue. Something calamitous could happen to the scheme. That happened in America, where big airlines and big steel companies became insolvent. We have been talking about steel companies today, so this is not far fetched. Such things can happen. We could experience a sectoral recession that hits an industry, causing a rush of claims on the fund. It would then be wrong to jack up the levy excessively on the firms that survive or to slash the pensions in payment to retired people.
	The right thing for the Government to do would be to tide over the PPF. That would not be expensive; the Government would get back their money, because steel firms or airlines will not go to the wall every year. There will be good years and bad years, and the Government would see the PPF through the bad years. I simply cannot understand the point of paragraph 29 of schedule 7, unless the Chancellor is behind it, and I presume that he is because he does not want the borrowing to appear on his balance sheet. We fundamentally believe that this will not be a proper insurance scheme unless the Government stand behind it as lender of last resort.
	To draw those threads together, we moved a similar amendment in Committee because we believe passionately that the Bill is fatally flawed: it will set up not a proper insurance scheme, but an insurance scheme with a hole in it. If people make a claim on the scheme in a good year, everything will be fine; but if they make a claim in a bad year, the insurer may turn round and say, "Sorry, we're not going to pay out." Given that we have discussed restoring confidence in pensions and that the PPF and the special financial assistance scheme are supposed to restore confidence, what will paragraph 29 of schedule 7 do? It will undermine confidence in pensions. It says, "You thought you were insured, but you weren't."
	The history of pensions is that people are given promises and Governments tell them things, but when they go back to the Government, they are told, "We didn't mean it," "We meant something else," "We forgot to tell you," or "There's something in the small print." That is a dreadful basis on which to set up a shiny new scheme. Paragraph 29 of schedule 7 does not belong in the Bill. A better way forward would be for the Government to lend the money when things get difficult. That is why amendment No. 31 deserves the support of the House.

Malcolm Wicks: The hon. Member for Northavon (Mr. Webb), who has spoken for about half an hour, has a certain style. His style is to seek to rubbish any decent, progressive and positive social reform that this Labour Government bring. With pension credit, he says that it is about stigma and complexity and, as a result, some of his own constituents will be put off claiming it. With the PPF, he pours circumstance on circumstance and absurd eventuality on eventuality to say that we will not be able to pay proper benefits. Of course, he was equally cynical about the assistance scheme that we introduced this afternoon. As I said, he has a certain style. It is cynical, pessimistic, negative and sneering; it is about seeking to achieve the triumph of fear over hope. But we have seen through him and will not let him get away with it.
	We have carefully costed the pension protection fund. We are determined that those of pensionable age will have 100 per cent. of pension rights. We are determined that the workers will get 90 per cent. We are determined that those who have to retire on ill-health grounds will get 100 per cent. We know how we will pay for it. We have learned the lessons from the Pension Benefit Guaranty Corporation—
	It being Seven o'clock, the debate stood adjourned.
	Debate to be resumed tomorrow.

SITTINGS IN WESTMINSTER HALL

Ordered,
	That, on Thursday 10th June, there shall be no sitting in Westminster Hall.—[Mr. Heppell.]

PETITION
	 — 
	Children's Hospices

Jeff Ennis: I wish to present a petition on behalf of my constituent, Mr. Peter Finnegan, and several thousand residents from my constituency and throughout South Yorkshire to protest at what is perceived to be the iniquitous level of national health service funding being allocated to children's hospices when compared with that allocated to adult hospices.
	The petition states:—
	To the House of Commons
	The petition of Mr. Peter Finnegan and residents of South Yorkshire
	Declares that while adult hospices receive 37 per cent. of their funds from statutory sources, children's hospices receive only 4.17 per cent. of their funds in this way. Children with life-threatening illnesses and their parents need adequate hospice facilities, and the gap between the funding allocations to adult hospice facilities and to services for children is unfair to children and their parents.
	The petitioners therefore request that the House of Commons urge the Secretary of State for Health to review hospice services for children. The petitioners further request that the House of Commons pass legislation to rectify the imbalance in funding allocations to children's and adult hospices.
	And the petitioners remain, etc.
	To lie upon the Table.

TRAVELLERS' SITES (WEST LEEDS)

Motion made, and Question proposed, That this House do now adjourn.—[Paul Clark.]

John Battle: In recent times, there have been several attempts, through early-day motions and private Members' Bills, to address issues to do with Travellers and the law, and those have received helpful and encouraging responses from Ministers. However, we need legislative action now to break the Gordian knot of local conflict.
	In the Minister for Housing and Planning's opening remarks on the Housing Bill last week, he reminded us of its overall aim and purpose, which is to help to build sustainable communities and to tackle the most pressing problems of homelessness and unfit conditions, but I submit that that will be unachievable unless the persistent conflict between residents and Travellers in our neighbourhoods is addressed. The Government have some responsibility, as do local authorities, to resolve the conflicts.
	Supported by the Commission for Racial Equality, Shelter, the Local Government Association, the local chief police officer, the Children's Society and the Travellers law reform coalition, I tabled amendments to the Housing Bill. They attempted to reinforce that aim of sustainable communities in practice by changing the law so that we could tackle the conflict that has been raging unresolved for years in our neighbourhoods and communities between the settled population and the Travellers and Gypsies who are camped on inappropriate illegal sites.
	The Government have a responsibility not to push the problem on to local councils, which then push the conflict into the surrounding neighbourhoods, while hoping that it is somehow magically resolved. We need to come up with a solution from which both Travellers and local residents benefit. We need to give Travellers accommodation, which means proper sites, with the same status as housing, so that it is assessed and delivered in the same way. That could be twin-tracked with a statutory duty to provide and facilitate more site provision. There should be a proper obligation on local authorities to provide and facilitate sites, and we should allow Housing Corporation money to be used for the purpose of constructing new sites, as my amendments suggested. In the words of the Traveller law reform coalition, we need to work for
	"a win-win situation from which Travellers and non-Travellers will benefit."
	We cannot toughen up the law to move Travellers on if there is nowhere for them to go. Recently, in the neighbourhood of Wortley in my constituency, 12 caravans were parked on the Oldfield Road football pitches, which were moved off. They moved to Farnley park over the Easter weekend, making local football and cricket impossible. They were evicted and moved down to Hunslet, where they were evicted again and moved to another public park, Western Flats, in Wortley. They have been driven off the Western Flats and are now at Wortley recreational ground. They have received a notice to move on Friday.
	Those 12 caravans belong to one family, who have lived in Leeds for generations. The family group includes an elderly man with Alzheimer's, a young child with pneumonia, a two-month-old baby who has never received appropriate medical attention because of the constant movement of the family, and a mother who recently collapsed and was in hospital for two days. Some of the children go to local schools in my constituency and are taken there every day by the Travellers education support unit. Since January, the caravans have been moved 50 times, so the children do not know where they are going home to after school. That is quite apart from the fact that the caravans are on sites without water or toilets, and are thus insanitary and quite inappropriate for families.
	The endless round of court notices and eviction enforcements mean that families are pushed from pillar to post. Everybody, from settled neighbours to Travellers and their families becomes totally exasperated, and council officials and the local police are caught in the middle of many angry conflicts. The cause of the problem is the shortage of sites or pitches on which the caravans can stop. In practice, 30 per cent. of Travellers in Britain are hounded from one unauthorised place to another, with all the associated problems of unofficial camping, clean-up costs and no chance of proper education for the children. Furthermore, poor living conditions have a detrimental impact on the health of Traveller families, who have the lowest life expectancy and the highest child mortality rates of any group in Britain.
	Ironically, the only permanent site for Travellers in Leeds is in the very Wortley ward where that family is being moved around. It is located at Cottingley Springs and has 41 plots. The Caravan Sites Act 1968, backed up after 1980 by 100 per cent. Government grants, was designed to provide sites. The unauthorised encampment figure went down from 80 per cent. to 30 per cent., but the measure was repealed by the Conservative Government in 1994 and the duty on local authorities to provide sites ended. The Conservative Government suggested that the onus in future should be on Travellers and Gypsies to provide their own private sites. In practice, as everyone knows, when Travellers buy private land they can hardly ever get planning permission to have a site on it. Following the repeal of the duty on local authorities to provide sites, the number of sites has declined, and some have been shut down altogether. Bradford, for example, has a site of 30 plots; Wakefield, 40 plots; and Leeds, 41 plots, all at Cottingley Springs, which was built in 1969. In Leeds in January 2004, however, there were 51 unauthorised encampments, an increase from 34 the previous January. In Leeds, if my figures are right, there are some 1,500 Travellers, including 500 children of school age. About 50 to 70 Traveller families now live in ordinary housing. The real problem, for which Leeds city council should take some responsibility, is that there are no transit sites. There is a permanent site, but no transit sites.
	A briefing paper from Leeds city council race equality advisory forum that was sent to the council's scrutiny board states:
	"The primary concern of Leeds Travellers is inadequate site provision."
	It acknowledges the existence of Cottingley Springs, but goes on to say:
	"There are no official transit sites in Leeds."
	The Travellers' view is, "You want to evict us, but where can we go?" There is nowhere that can be suggested. Every week an average of 10 Traveller families—80 to 90 people in 30 caravans—are living on unauthorised sites with no sanitation, no utilities and no refuse collection. There are an average of three evictions a week that cost about £2,500 a time, excluding police costs, staff costs and possible legal costs.
	There are no vacancies at the Cottingley Springs site. Families are doubling up and there is a large waiting list—60 families, I understand. In Yorkshire, there are no local authority sites at all in Castleford, Pontefract, Huddersfield, Dewsbury or Halifax. There are no sites in the Kirklees area, none in Calderdale and none in the whole of north Yorkshire. There is only one site in Wakefield, one in Leeds and one in Bradford.
	The Conservative Calderdale council, for example, which takes a hard line, evicts Travellers from unauthorised sites and escorts them to the Sheffield roundabout, directing them to head for Leeds or Bradford. That is unacceptable. It does not resolve the problem, but merely passes the buck and is a recipe for continued local conflict.
	In a debate such as this we need a sense of perspective and a sense of proportion. The problem is not infinite. The Traveller community in the whole of England and Wales is made up of 90,000 to 120,000 nomadic or mobile Travellers, with an estimated further 200,000 of Traveller ancestry living in settled housing. In the last national count of Travellers' caravans published by the Office of the Deputy Prime Minister in January, there were 14,309 caravans, 3,571 or 25 per cent. of which were on unauthorised encampments. There were 5,848 caravans on authorised council sites and another 4,890 on authorised private sites.
	There are some 320 council-owned sites in England, providing some 5,000 pitches. I know that research carried out by the Office of the Deputy Prime Minister in 2002 showed that by 2005 a further 3,000 to 4,500 additional permanent and transit pitches would be needed to resolve a future crisis. The Gypsy Council believes that that is an underestimate of the real need. I believe we need 1,000 to 2,000 additional residential pitches and between 2,000 and 2,500 transit pitches in England and Wales. Surely we can go some way to making that provision and resolving the problem.
	We need to broaden our definitions of accommodation and include the accommodation needs of Travellers and Gypsies under the definition of housing need. That would enable them to be considered as in housing need, rather than telling them that by law they must move on to some undefined place. That would alleviate pressure on site provision. It would enable local authorities and the Government to access housing association resources to provide new sites with decent provisions on a scale that we have not managed to achieve since the efforts of 1969. It would allow social landlords to register as site providers. That in itself could open up flexibility in provision.
	I do not believe that there are no practical measures that could be taken to resolve the problem. Including Travellers in the provision of accommodation should be part of social cohesion and sustainability strategies, not forcing them to live in permanent housing, but to allow sufficient capacity of permanent and temporary sites to enable them to move around and retain their traditional way of life. A little joined-up working between local authorities is needed to stop Travellers being passed backwards and forwards across local authority boundaries to councils that have sites from councils that do not have sites. The Traveller law reform coalition has introduced proposals to underpin the mainstream approach to site provision. It works with local authorities, the Children's Society, Shelter and the Commission for Racial Equality to press for an effective accommodation policy.
	The Government have promised a review, and that point was reinforced by a helpful reply from my right hon. Friend the Minister for Housing and Planning on Third Reading of the Housing Bill on 11 May, in which he said that the Government were looking to bring the review forward and to take some action.
	In 2002, the hon. Member for Bournemouth, East (Mr. Atkinson) attempted to introduce the Traveller Law Reform Bill, based on work by the Traveller law research unit of Cardiff university and the Joseph Rowntree housing trust, so the attempts to resolve the problem are underpinned by hard-headed research. Sites are not provided on the basis of guidance to local authorities alone—we have seen that that does not work—so sites must be treated like other forms of accommodation.
	Sites should be assessed alongside housing needs, which are fed into the regional housing strategy, the regional spatial strategy and plans at the local level. That will enable us to ensure that sufficient provision exists to resolve the problem sensibly and practically. We need new measures to increase the level of Traveller site provision to break out of the vicious circle of unauthorised stops, complaints, evictions, moves on, unauthorised stops, complaints, aggravation and moves on. Residents and Travellers should not be forced into that cycle for ever.
	The new Housing Bill provides a good opportunity for the Government to break through that vicious circle. We must move the agenda forward and resolve the challenge as a matter of urgency. The Housing Bill now moves to the other place, so I plead with the Minister not to miss this parliamentary opportunity to do something positive about a long-standing conflict that affects many constituencies, urban as well as rural. Positive action will benefit both local residents and Traveller and Gypsy families alike. The challenge can be met and the problems can be resolved, but it will take determined action by the Government and local authorities to play their full part.

Yvette Cooper: I congratulate my hon. Friend the Member for Leeds, West (Mr. Battle) on securing the debate and on raising an important issue.
	My hon. Friend addressed the issue in a balanced, thoughtful way by describing his constituency experience and the impact of the shortage of sites both on Gypsy and Traveller groups and on the settled community. He is right that the issues can cause extreme stress and distress for both the settled community and people who are struggling to find somewhere to stay put.
	My hon. Friend rightly identifies that the heart of the problem is that not enough sites are currently available to meet demand. That can lead to unauthorised encampments, which can cause great distress to the local community, especially where damage is done to local areas. That can also lead to unauthorised development, where Gypsies and Travellers buy up sites for which planning permission is not given, which causes all sorts of frictions both within the planning system and, again, with local communities. Unauthorised development has increased significantly over the past few years.
	My hon. Friend set out that Gypsy and Traveller communities often have below-average health and educational outcomes and life expectancy, above-average infant mortality, and that their children achieve poor results in school. Social exclusion is also a serious consequence, which may be exacerbated when families move from place to place over a short period of time. There can also be serious consequences in terms of social tensions between different groups and communities. Given our strong desire to promote social cohesion and sustainable communities, we need to take those issues seriously. We should recognise that in many areas, sites have been responsibly managed and Gypsy and Traveller groups can live amicably alongside local settled communities. However, my hon. Friend is right to say that all sorts of tensions can arise where matters are badly handled and there are problems with site provision.
	There are wide variations in the approach taken by local authorities in terms of their attitude to planning applications, the efficiency of their planning enforcement systems and the number of sites that they provide. My hon. Friend described the position in parts of Yorkshire. Other parts of the country, too, show very wide variations. It is disappointing that some local authorities with significant problems with unauthorised encampments and developments do very little to provide appropriate sites. We are concerned about that.
	We have launched a major Government review of Gypsy and Traveller accommodation. I believe that it is unprecedented for any Government to look in such detail at the accommodation requirements of Gypsy and Traveller groups and communities. In conducting that review, we are working closely with local authorities, Gypsy and Traveller groups, the all-party group on Traveller law reform, the Commission for Racial Equality and other groups. I have taken part in seminars to discuss the issues and possible options with a range of stakeholders. I have also met several MPs from all over the country to try to ensure that as wide a range of views as possible feeds into the review and that concerns from across the country are taken seriously.
	The review is still under way, but I want to take this opportunity to highlight a few aspects on which we are already making progress. My hon. Friend referred particularly to publicly provided sites, but the issue of privately provided sites is increasingly significant. Interestingly, the level of unauthorised encampments over the past few years has stayed broadly stable, but the level of unauthorised developments has increased significantly. That can cause great conflict in the planning system. There are two problems with the planning system as it stands: first, planning guidance can make it difficult for Gypsies and Travellers to identify appropriate sites to buy or to get planning permission to move on to; and secondly, the local authority's enforcement process in respect of inappropriate sites can be ineffective or cumbersome. We need to deal with both sides of that problem at the same time.
	That is why we are reviewing the planning guidance that is given to local planning authorities in relation to Gypsy and Traveller accommodation. We expect local authorities to provide more help and support for Gypsies and Travellers in identifying appropriate sites, because too many do not do so. We are considering how planning guidance should be revised to ensure that that happens. At the same time, we have introduced into the Planning and Compulsory Purchase Bill a new temporary stop notice that will allow local authorities to take swift action to prevent long-term damage to sites where development is inappropriate. Again, we intend to consult in more detail on how that should work and be implemented before it is introduced because it is important to maintain a balanced approach and ensure that we are fair, in a way that the current system is not, to Gypsy and Traveller groups and the settled community.
	My hon. Friend is right that public site provision varies throughout the country. We are keen for Gypsy and Traveller accommodation needs to be tackled alongside those of everybody else. It should be part of mainstream consideration of accommodation and housing need in every local area. For the first time, therefore, we expect local authorities to consider and tackle the need for accommodation for Gypsies and Travellers in their assessment of local accommodation needs. We shall issue revised guidance next year on how to do that. Housing and site need assessments will feed into the regional spatial strategies and the regional planning system. We are considering in more detail exactly how that should work and whether other measures are required to overcome some of the unnecessary barriers to site provision.
	The Gypsy site refurbishment grant is available and has been expanded and extended to improve the conditions on sites throughout the country and to provide new transit sites and stopping places. My hon. Friend mentioned the need for transit sites in his area. Local authorities can apply for the refurbishment grant to provide more transit sites. So far, 205 separate site improvement projects have been funded. They have already made substantial improvements to the quality of many residents' lives.
	My hon. Friend also mentioned permissible purposes for Housing Corporation money. We plan to extend the permissible purposes of that money to allow local registered social landlords to provide Gypsy and Traveller sites.
	We are still considering a series of other issues, as my right hon. Friend the Minister for Housing and Planning said. We have not yet made any decisions about legislation and believe that many of the changes will be possible without it. However, we have not concluded the process of considering different legislative options, as my right hon. Friend explained when he replied to the debate on the Housing Bill.
	We recognise the importance of the issue and of a level playing field for local authorities so that they acknowledge and accept their responsibilities. Local authorities face different problems in different areas, and the need for sites and accommodation will be very different in different parts of the country; we would not expect to take a uniform approach. It is right that the authorities should recognise their responsibilities in this regard, as my hon. Friend said.
	It is important for us to conduct the review in a thorough way, and to involve all those who have a stake in the process, so as to ensure that we get the right response. My hon. Friend's points have been very helpful in that regard. We also need to recognise that this is not simply an issue of site provision, important though that is. There are other issues involved, including those of antisocial behaviour and unauthorised encampments, which need to be addressed. That is why we are consulting, in conjunction with the Home Office, on guidance on the new powers against trespassing that were introduced in the Anti-social Behaviour Act 2003. In the longer term, we are keen to work with other Departments on other issues, particularly the Department of Health and the Department for Education and Skills, in regard to the health needs of Gypsy and Traveller groups and their educational attainment, given the lower levels of attainment for Gypsy and Roma groups in many of our schools.
	As I have said, a wide range of social exclusion issues is raised by the circumstances that Gypsies and Travellers face. It is important that we take a fair approach across the country, taking into consideration the different circumstances of Gypsy and Traveller groups and the needs of the settled community in different areas. I will certainly keep in touch with my hon. Friend about these issues as they progress, and about the work that we are doing as part of the review. There are not as many easy or swift answers as we would like, but I can assure him that we are taking this issue very seriously and examining it thoroughly, so as to find long-term improvements to the problems that trouble many areas of the country and which should not be doing so. It ought to be possible to resolve those issues in the long term, but we will need local communities, Gypsy and Traveller groups and local authorities to work together to ensure that we find sustainable solutions that meet everyone's needs.
	Question put and agreed to.
	Adjourned accordingly at twenty-nine minutes to Eight o'clock.